Alaska Permanent Fund tops $40B

The Alaska Permanent Fund has topped $40 billion in value for the first time, state officials said. The state’s oil-wealth savings account flared on Wall Street July 12, closing with a value of almost $40.2 billion.

“We should all be proud of this milestone. I thank the trustees for their exceptional management of the fund,” said Gov. Sarah Palin.

Less than three years ago, the fund broke through the $30 billion barrier.

Fund money is invested in stocks, bonds, real estate and other instruments. A part of the fund’s profits go toward distributing a dividend to all qualified Alaska residents each fall. This year’s dividend is expected to be more than $1,500, up almost $500 from last year’s.

The dividend amount is based on an average of the last five years of Permanent Fund profits. The largest amount ever paid was $1,964 in 2000.

The fund is expected to show a gain of 16 to 17 percent for the fiscal year that ended June 30.

“It’s absolutely extraordinary,” said Michael Burns, the fund’s Juneau-based executive director. “This last 12 months, the fund has grown around $7 billion.”

Carl Brady, chairman of the fund’s board of trustees, noted the fund’s first deposit of oil money in 1977 was less than $1 million. Since then, Brady said, “a diversified portfolio of investments has allowed the fund to grow to $40 billion in just over 30 years, while paying out $13.7 billion in dividends.”

The fund’s investment philosophy was extremely conservative initially, with trustees favoring relatively safe investments, mainly bonds. Over the years, state legislators have loosened the reins on the fund, giving trustees the discretion to widen the investment portfolio.

—The Associated Press