August 02, 2004
"We're pleased that the Fund had such a strong year, especially after coming through several years of down markets and low returns," said Acting Executive Director Bob Bartholomew. "The Trustees' commitment to making long-term investment decisions and adequately diversifying the Fund's portfolio put us in a good position to take advantage of the upswing in the markets earlier this year."
Bartholomew added that all of the Permanent Fund's asset classes produced positive returns this year, with domestic and international equities showing double-digit returns. He cautioned that these are still preliminary figures and that audited year-end financial results will be included in the APFC's annual financial report in September.
"These figures really highlight the importance of a diversified portfolio," said Bartholomew. "Assets sometimes run counter cyclical, so investing the Fund in various markets helps protect the value of the Fund while providing for steady growth and distributions over time."
The Fund saw growth from two sources, receiving oil revenues of $353 million and a $3.4 billion increase in the value of the investments. After accounting for the scheduled $581 million payment to the Permanent Fund Dividend Division, the Fund had a net growth of $3.2 billion over the fiscal 2003 year-end balance.
"The significant growth of the Permanent Fund this year following the past several years of poor performance helps highlight how volatile the markets are," said Bartholomew. "This was a banner year, but the Fund experienced losses in 2001 and 2002 and now has an annualized return of five percent over the last five years. It's important to focus on how the Fund performs over time and not just look at individual years."
Financial and performance reports are available on the Alaska Permanent Fund web site. The 2004 Annual Report will be available both online and in hard copy on September 20, 2004.
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