The Alaska Permanent Fund Corporation has released its fiscal-year 2025 annual report — fittingly titled "49 Forward" as the Fund approaches its 50th birthday. The headline: a net return of 9.4%, slightly ahead of its benchmark. That's a good year. It's also only half the story.
The good news
A 9.4% return on a fund this size is real money — billions of dollars of growth — and beating the benchmark means the Fund's managers added value versus simply tracking the market. Over the year the Fund's total value climbed into the low-to-mid $80 billions, on its way past $89 billion by spring 2026. By the standards of a large, diversified global portfolio, FY2025 was a solid year of work.
Why a good return isn't the whole scorecard
Here's the question that a strong headline return lets us avoid: how much of that growth did we keep — in real terms — and how much did we protect for the future?
Three things can quietly undo a good investment year:
- Inflation. If prices rose meaningfully, part of that 9.4% just keeps the Fund even in purchasing power. Only the amount above inflation is real growth — and only if it's actually retained in the Principal through inflation-proofing.
- The draw. Each year the state pulls roughly 5% out under the POMV rule, for the dividend and government. A 9.4% return comfortably covers a 5% draw — in a good year. The trouble is the bad years.
- What we do with surpluses. A strong year is the easiest time to top up the Principal and build a cushion. It's also the easiest time to spend more and assume the good times continue.
Investment returns are the score on the field. Whether the Fund actually grows for the next generation is decided in the budget.
The takeaway
FY2025 shows the Fund is being invested well. That's worth celebrating — and it's the part Alaskans can't directly control. What we can control is the stewardship around it: protecting the real value of the Principal, drawing sustainably, and saving good years against bad ones. A 9.4% return is a gift. Whether it compounds into a bigger Fund for our kids depends on choices made in Juneau, not on Wall Street.