A grand year for permanent fund?

Dividend may near $1K for first time since 2003

Posted: Wednesday, April 19, 2006

This fall's permanent fund dividend could be close to $1,000, the Alaska Permanent Fund Corp. estimated Tuesday.

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Although the amount of the 2006 dividend paid to every eligible Alaskan won't be announced until mid-September, the corporation issued a statement saying the fund finished in March with a value of $33.9 billion. The fund has earned $2.1 billion in realized income - money that will be used to calculate the dividend - through the first three quarters of fiscal 2006, it announced.

The dividend is paid from a five-year average of the fund's investment earnings, which had decreased for the last five years. It hasn't approached $1,000 since 2003, when it dropped to $1,107.56. Last year's dividend of $845.76 was the lowest paid out since 1988.

International stocks were the top performers in the fund's portfolio in the third quarter, returning 9.4 percent over the three-month period. Domestic stocks also performed well, returning 5.3 percent for the quarter, according to Tuesday's report.

The strong performance comes despite expectations that high oil prices, the residual effects of Hurricane Katrina, higher interest rates, a cooling-off of the housing market and slowing of China's economy would slow global economic growth, Tuesday's report stated.

So far in fiscal year 2006, the fund's investments earned 11.9 percent and the fund gained $3.9 billion in value. By comparison, the fund's return was 10.4 percent in 2005, and 14.2 percent in 2004.

Low investment returns in 2002 and 2003 will continue to be figured in the average.

The fund was created in 1976 and paid its first dividend - $1,000 - in 1982. It has been as low as $331.29 in 1984 and as high as $1,963.86 in 2000. It has dropped every year since.

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