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Alaska Permanent Fund's 2012 investments flat, PFD payout smaller

Alaska Dispatch

The Alaska Permanent Fund closed fiscal year 2012 with a value of $40.3 billion, up $193 million from last year, according to a press release sent out by the Alaska Permanent Fund Corporation on Thursday. It was a volatile year for global markets, but investments managed to stay flat, returning 0.02 percent. Still, the dividend payout is down nearly $200 million from last year.

Stocks did poorly over the last year, especially in overseas markets, where the Eurozone debt crisis raised concerns over the region’s stability. Returns on the Permanent Fund’s non-U.S. portfolio were down 14.6 percent, while those on the global portfolio fell 4.7 percent. U.S. stocks, on the other hand, returned 2.3 percent, after starting off the year sharply down, and then rising through the second and third quarters.

In face of Europe’s perceived instability, bonds were considered a safe investment, and investors were driven to U.S. bonds, which returned 7.8 percent. Non-U.S. bonds returned 6.5 percent, as even they seemed safer than stocks to investors.

Real estate performed well, returning 11.4 percent.

Overall, the Permanent Fund earned $1.6 billion in statutory net income, which includes the above factors. The Alaska Permanent Fund uses a five-year average of statutory net income to determine each year’s Permanent Fund payout. This year, the Permanent Fund Dividend Division will receive $605 million for the fall payment; in 2011, it was $801 million.

The final review of the Permanent Fund’s performance will take place in Anchorage on September 26 and 27.

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