A colorful graph paints a pretty picture— the Alaska Permanent Fund did well in fiscal 2015. Not so much this year to date.
With a strategy that focuses on long-term investment, permanent fund managers stayed clear of trying to time the markets, or zero in on short-term market potential in the most recent complete year of statistics related to the fund.
The fund stuck with a proven strategy, and it paid off with a 4.9 percent, or $1.6 billion, increase to the fund, which totaled $52.8 billion as of June, the close of the fund’s fiscal year, according to the Alaska Permanent Fund Corp’s recently published annual report.
Despite volatility, its U.S. stock market portfolio gained 7.2 percent. The non-U.S. portfolio lost 5.2 percent. Still, the global portfolio with both U.S. and non-U.S. funds, returned 1.2 percent.
When it came to bonds, the U.S. bonds increased 1.2 percent and the non-U.S. bonds decreased 2.4 percent.
Other portfolios — private equity, infrastructure investments, and various types of other investments — all returned increases.
The real estate portfolio increased 9.8 percent, and the permanent fund acquired new investments nationally and internationally.
Alaskans, through the permanent fund, bought Valwood & CentrePort Industrial Park in Dallas, the Faraday warehouse in Carlsbad, Calif., and four industrial properties in Illinois and Ohio. Alaska also acquired 50-percent interest in Zenia Boulevard Shopping Centre in Alicante, Spain and Alegro Alfragide Shopping Center in Lisbon, Portugal.
Financial and property gains weren’t the fund’s only advances. In 1977, the Alaska Permanent Fund Corp. started out heavily dependent on outside management located near financial markets. But, with increased experience and new technology, it has focused on bringing those managerial jobs to Alaska.
This increases the number of good-paying jobs in Alaska and saves the corporation millions of dollars in management fees.
Such changes will prove to assist Alaska as it struggles to pull itself out of a financial crisis. The state needs local jobs and Alaskans relying on Alaskans for goods and services to build an economy that supports Alaska. Alaska providing jobs elsewhere won’t do it.
Alaskans who support Alaska will continue to receive an Alaska Permanent Fund dividend. The fund paid out $1.3 million in dividends last fall.
That figure will be affected by current domestic and global economies and the state’s financial crisis. The permanent fund is likely part of the solution in resolving that crisis, which might be a fixed and/or lowered dividend payout. But, also, the permanent fund’s value has declined since June to $49.5 billion. That’s a $3.3 billion drop.
Financial pictures change all of the time. Alaskans, however, planned for inevitable ups and downs. That’s what the Alaska Permanent Fund is all about.
— Ketchikan Daily News,
Feb. 6, 2016