Dividend could be biggest in years

Alaska Permanent Fund Corp. CEO says this year’s checks could be $1,100, largest since 2003; payout peaked at $1,964 in 2000

The Associated Press

Alaskans could be getting the biggest permanent fund dividend in years this fall.

That’s because the Alaska Permanent Fund reported a record $2.7 billion profit for the 12 months that ended June 30. Managers of the state oil-wealth savings account also said dividends over the next few years are likely to jump even more in size.

Each year’s dividend payment is based on the fund’s average profits for the previous five years. The fund is finally freeing itself of the bad stock markets of several years ago.

“The dividend has clearly turned around,” said Mike Burns, the Alaska Permanent Fund Corp.’s chief executive. “We’re starting to get the effect of the bad markets out of our system.”

The Permanent Fund, created in 1976, is now valued at $34 billion. The money mostly is invested in stocks, bonds and real estate. Each year, a portion of the gain on investments is distributed in the fall to Alaskans who have lived in the state for at least one calendar year.

In late July fund managers allocated $688.6 million for this year’s dividend. Depending on the number of applicants, that likely will equate to a dividend of about $1,100, which would be the biggest payout since 2003.

Dividends peaked in 2000

State officials said they’ll announce the exact amount of the 2006 dividend on Sept. 20.

The fund gets part of the state’s oil and gas revenue. Last year, amid soaring oil prices, it received a record $601 million, Burns said.

The biggest portion of the fund, about 35 percent, is invested in American stocks. Together, they returned 10 percent last year, the Permanent Fund reported.

By comparison, stocks listed on the Standard & Poor’s 500 index gained an average 6.3 percent and the Dow Jones Industrial Average rose 8.2 percent during the same period.

Foreign stocks, which make up 20 percent of the Permanent Fund, were its star performers, posting a better than 26 percent gain. The fund’s real estate investments, about 11 percent of its total assets, returned 18 percent.

Those gains were muted by a marginal decline in American bond investments, which make up 26 percent of the fund and slipped three-tenths of a percent last year.

Meanwhile, foreign bond investments gained six-tenths of a percent, while hedge funds gained 11.5 percent. Each of those investment types makes up 3 percent of the fund.