Trustees Adopt Risk Tolerance Metrics for Long-Term Investment Management

In Uncategorized by Paulyn

Juneau – The Board of Trustees held its quarterly meeting via webinar on February 17-18, 2021 to consider the Alaska Permanent Fund’s mid-fiscal year performance, assess risk appetite for the portfolio, review capital markets insights, and assess the long-term asset allocation.

The Board adopted a quantitative risk metric to support its comprehensive asset allocation review. APFC’s risk appetite is defined in terms of a Risk Tolerance Portfolio based on an 80/20 Equity/Bond mix and a Liquidity level floor for the combined allocation to Public Equities, Fixed Income and Cash.

Chair Moran noted that “the adoption of this metric provides the Board with an additional benchmark tool for the long-term investment of the portfolio. The Trustees have an established target return level, and we now have identified a risk appetite to provide a framework for the asset allocation and a reference for the overall risk tolerance in the portfolio.”

As the meeting concluded, Chief Executive Officer Angela Rodell remarked that “asset allocation is the most important undertaking we do. It is the foundation that generates return and minimizes risk. The work done by the Trustees at this meeting, the upcoming asset allocation workshop, and the board meeting in May is instrumental in delivering on Alaskans’ expectations. It is equally imperative to note that we rely on Alaskans to provide us with the stability we need to inform our decisions.”

The next meeting of the Board of Trustees will be held in Juneau, Alaska, on May 19-20, 2021.

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