July 1, 2021, marked the start of APFC’s 2022 Fiscal Year. As we set forth into the new Fiscal Year, following the timely resolution of the state’s operating budget, we recognize the commitment and continued professionalism of APFC staff who have been working diligently to support our fellow Alaskans. APFC remains fully operational and we continue to actively manage the assets of the Permanent Fund, identifying and acting on compelling investments to deliver on our mandate of generating outstanding returns for the benefit of all current and future generations of Alaskans.
Along with the start of the new Fiscal Year is the adjustment of asset allocations to fit within the targeted ranges established by the Board of Trustees every 5 years. This shift of assets across the Fund’s 8 asset classes includes 1 percent decreases in Public Equities and Fixed income investments, while increasing investments in Real Estate and Private Equity by 1 percent. The other asset classes are targeted within the same allocations through FY25. The total portfolio mix is intended to represent the expectations of the Board’s long-term vision while conforming to their approved risk appetite for the Fund.
As the Principal of the Fund is protected constitutionally, the Earnings Reserve Account is available for legislative appropriation. State Legislature has an established Percent of Market Value formula for sustainable withdraws from the Fund set at 5 percent annually.
A $3.1 Billion POMV draw will be transferred to the State of Alaska during FY22, which represents the primary revenue source for the state. Revenue generated by Permanent Fund investments now constitute more than 70% of the state’s general fund – meaning that 70 cents of every 1 dollar spent on education, public safety, transportation and other essential services and programs comes from the Fund’s earnings.