Trustees Review Performance and Active vs Passive Management

In Uncategorized by Paulyn

The Board of Trustees held its quarterly meeting in Juneau, Alaska on May 22- 23, 2019 to review the performance of the Alaska Permanent Fund through the third quarter of fiscal year 19 , assess the opportunities of active vs passive management, review the securities lending program, and consider the asset allocation of the portfolio.  The Trustees did not make any changes to the Fund’s asset allocation.

The Fund’s investments gained 6.48% in the three-month period between January 1, 2019 and March 31, 2019 which contributed to the portfolio moving back into positive performance territory of 3.07% thru the third quarter of FY19.  The Fund ended March 31, 2019 with assets under management totaling $65.8 billion.

Chair Craig Richards noted that “APFC spends on average 25 basis points on active management of its stock portfolio each year.  With the trend of large funds to move away from active management to holding much cheaper index funds, it was a good time for the Board to examine if the active management strategy adds value for Alaskans.  I think the analytics clearly demonstrate that it does. After fees, $42 million per year (or cumulative $300 million) is how much active management has added annually to the overall portfolio of the Fund over the past 7 years.”

2019MAY_APFC BOT Quarterly Meeting FY19Q3