The Alaska Permanent Fund, established in 1976, has become a cornerstone of the state’s financial stability and public services, especially as oil revenues have declined. Celebrating its 50th anniversary, the fund reflects a long-term vision that has successfully converted a portion of the state’s natural resource wealth into a sustainable financial asset for future generations.
In a pivotal moment early in Alaska’s statehood, voters amended the state constitution to allocate a share of oil and mineral revenues to create the Alaska Permanent Fund. This decision was rooted in the understanding that while Alaska’s natural resources are finite, the opportunities they offer can be preserved. Within a year of its establishment, the fund received its first deposit of $734 million. Today, its value has soared beyond $85 billion, marking it as one of the most successful sovereign wealth funds globally.
The fund’s significance has grown particularly as petroleum revenues have dwindled, underscoring the foresight of its creation. Currently, the annual draw from the fund contributes over 60% of the state’s unrestricted general fund, financing essential public services and providing annual dividends to residents. This disciplined approach to managing the fund ensures that while current needs are met, the majority of the assets remain invested for future Alaskans.
Central to the fund’s structure is a rigorous discipline that mandates a portion of all oil and mineral revenues to be deposited into the fund. Alongside special appropriations and measures for inflation-proofing, these deposits are strategically invested across various global markets. The fund’s withdrawals are governed by a Percent of Market Value draw, based on a five-year rolling average of its value. This system allows for sustainable support of both current and future financial needs.
The Alaska Permanent Fund Corporation (APFC) Board of Trustees and its staff emphasize the importance of maintaining the fund’s strength and sustainability. As the milestone anniversary is marked, they reaffirm their commitment to ensuring it serves generations to come. Notably, at the close of fiscal year 2025, the fund earned more than $7.8 billion, with a reported 9.35% return for the year. Over the past decade, it has achieved an annualized return of 8.08%, consistently outperforming its benchmark and total return objectives.
These impressive results stem from a diversified, long-term investment strategy across eight asset classes, including public equities, fixed income, and real estate. APFC trustees, including Chair Jason Brune and Vice Chair Ethan Schutt, highlight that the journey of the Permanent Fund is not merely a celebration of past achievements. It is a call for ongoing stewardship, emphasizing the need for strong governance, transparency, and public trust.
As Alaska navigates changing economic landscapes, the Permanent Fund stands as a testament to the power of foresight and long-term investment. It embodies the principle that planning ahead can yield significant benefits, showcasing what is achievable when a state prioritizes sustainable growth over short-term gains. As the fund celebrates its legacy, stakeholders remain committed to ensuring its continued success for the benefit of future generations of Alaskans.