Permanent Fund hits record $91.9 billion but trails its benchmark, trustees hear in Nome

The Alaska Permanent Fund reached a record $91.9 billion this fiscal year and still fell short of its own performance benchmark, trustees heard at their Sept. 30-Oct. 1 annual meeting in Nome.

The fund returned 12.42% for the year that ended June 30. The performance benchmark returned 12.90%, so the fund trailed it by 0.48 percentage point, according to the corporation's 2026 annual report. Statutory net income, the realized earnings lawmakers can spend, reached a record $8.2 billion.

The fund now supplies about 66% of the state's unrestricted general fund revenue, according to a corporation presentation to legislators. That money pays for dividends and state services.

Chief Investment Officer Marcus Frampton told the Alaska Permanent Fund Corporation Board of Trustees that public stocks were the largest drag. They returned 23.9% against a benchmark of 24.22%. Part of the gap traced to holding less of the Magnificent Seven, the few technology companies that now dominate stock indexes.

A consultant from Callan, which advises the fund on investments, said the fund was far from alone. Those seven stocks make up about 45% of one major growth index, the consultant said, and most active managers hold less. Investment adviser Janet Becker-Wold agreed, saying diversification protects the fund if a concentrated market reverses.

Board Chair Jason Brune said he had thought staying out of the Magnificent Seven was the fund's own strategic choice. "I'm learning today our peers are taking the same approach," he said.

Frampton said trailing the index while paying about $100 million a year in management fees would be unacceptable.

Trustee Ralph Samuels asked how the board explains such a gap to people who will never sit through a daylong meeting. He said the fund should present it to lawmakers as falling between its peers and the index, and that simply telling them the fund is diversified would be "a loser argument." Samuels said public confidence grows more important as the fund becomes critical to funding state government.

Over 10 years, the fund returned 9.28% a year, ahead of its 8.91% benchmark, the annual report shows. Over five years, it returned 6.61% a year, slightly behind its 6.76% benchmark. This year's return also beat the fund's inflation-plus-5% objective of 8.54%.

The board established a new Benchmark Review Committee at the meeting. Frampton said he plans to ask it to line up outside managers' benchmarks with the fund's own.