U.S. and global stock markets reached record highs in July before investors' concerns over problems in the subprime mortgage market caused them to turn sharply downward. The Federal Reserve Board took action in August and September, lowering the primary credit rate and the federal funds rate respectively, and stock markets started to turn upward again. By September 30, the Dow Jones Industrial Average had increased by more than 8 percent from the quarter's low on Aug. 16.
For the quarter, the Fund's stock portfolios had positive returns, 1.8 percent for U.S. stocks and 2.2 percent for the global stock portfolio. Emerging market stocks continued their incredible growth, with the Fund's three emerging market portfolios returning between 8 percent and 14 percent, and contributing to the Non-U.S. portfolio's 4.4 percent return.
U.S. and non-U.S. fixed income did well for the quarter. The U.S. portfolio returned 2.8 percent and the non-U.S. portfolio returned 5.1 percent. Real estate also had positive returns of 1.7 percent, while the Fund's absolute return investments were flat at 0.2 percent.
The Permanent Fund received $157 million in mineral royalties for the quarter, and $1.1 billion in statutory net income, the value used to calculate dividends.