August 16, 2007
"We saw some remarkable milestones in fiscal 2006, and we're pleased that the Fund continued to show significant growth through fiscal 2007," said Michael Burns, Chief Executive Officer. "This year is a little bit unusual in that all of the Fund's portfolios had solid positive returns."
Fiscal 2007 started with the stock and bond markets on a low note, but both asset classes turned around in August as inflation concerns eased and the Federal Reserve held interest rates steady, sparking a rally that lasted through the winter. Continued economic expansion in Europe and strong performance from emerging markets allowed the Fund's non-US stock portfolio to provide even greater returns than the domestic portfolio.
A correction in late February that began in China sent world stock markets into a downward slide, however they recovered and turned up again at the end of March for a rally that held until June. The bond market's positive performance continued into May before heading downward. For the fiscal year, the Fund's US stock portfolio returned 19.2% and non-US stocks returned 31.6%. The Fund's US bond portfolio returned 6.2%, while the non-US portfolio returned 2.8% for the year.
The Fund's real estate portfolio had strong growth for the first three quarters of the fiscal year before falling off slightly in the final months, producing a 18.1% return. The absolute return portfolio returned 13.6% for the year.
The Permanent Fund's investments produced $5.4 billion in revenues for the year. The Permanent Fund received $3.4 billion in statutory net income, cash income from stock dividends, bond interest and real estate income as well as any gains on assets that are sold. This value is used in the five year average to calculate the dividend distribution, and in July the Corporation transferred $1.0 billion to the Dividend Fund. The Fund also received $532 million in mineral royalties for the fiscal year.
On July 12, after the close of fiscal 2007 and before the dividend payment was made, the Permanent Fund reached a record high of $40 billion.
The amount of the 2007 Permanent
Fund Dividend that will be paid to eligible Alaskans will be
announced on September 19th
Source of News:
Scripps Howard News Service, http://www.scrippsnews.com
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