PUBLISHED: 1:48 PM on Wednesday, April 30, 2008
Market turmoil impacts Permanent Fund in third quarter
JUNEAU - The Permanent Fund ended March 31, 2008 with a value of $37.3 billion, below the fiscal year starting value of $37.8 billion. The Fund's investments returned -4.6 percent for the quarter, producing a fiscal year-to-date return of -2.6 percent.

"This was the worst quarter for the Dow Jones Industrial Average since the burst of the tech bubble, and we certainly felt it at the Permanent Fund," said CEO Michael J. Burns. "It's at times like these that the Permanent Fund's long-term investment horizon is our greatest asset."

While the Fund was down overall, the US and non-US bond portfolios had positive returns, helping offset some of the losses in the stock markets. The Fund's US bonds returned 1.6% for the quarter and 7.0 percent for the fiscal year-to-date, while the non-US bond portfolio returned 6.9 percent for the quarter and 15.5 percent for the year-to-date.

Record commodity prices, along with continuing dismal news from the financial sector, contributed to the ongoing turmoil in stock markets around the globe. All three of the Fund's stock portfolios were down, with US stocks returning -9.7 percent, non-US stocks returning -8.5 percent and global stocks returning -9.3 percent for the quarter.

Despite losses the Fund's total value, statutory net income for the year was $2.5 billion as of March 31. This is the amount used to calculate the Permanent Fund dividend, and the final value on June 30 will replace Fiscal Year 2003 statutory net income of $355 million in the five year average.

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