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Idaho endowment fund value hits all-time high

The value of Idaho’s state endowment fund hit an all-time high of $1.46 billion at the end of March, up 14 percent from the start of the fiscal year July 1. That’s partly because of strong investment returns this year – through yesterday, the fiscal year-to-date investment earnings show a 19 percent gain – and partly because of higher revenue from endowment trust lands, which was up 14 percent through the end of March compared to same nine months of the previous year.  The receipts: $59.5 million. Much of the land revenue comes from logging on endowment lands. (In April, the fund had more gains, bringing it to $1.48 billion as of April 30.)

The state Land Board was briefed on the fund’s gains today by the Endowment Fund Investment Board, and there were smiles all around.

Investment returns for Idaho’s endowment fund have averaged 6.7 percent for the past five years, a big turnaround from the precipitous drops the fund saw after the state first started investing it in the stock market in the early 2000s. The fund lost nearly 15 percent of its value from 2000 to 2002, going from $803.7 million to $683.2 million.

When a 17.9% loss is good…

Idaho’s permanent endowment fund, whose earnings benefit public schools and universities, has been battered by the market in recent years. But there was relatively good news this week: For the fiscal year that ended July 1, the fund was down just 17.9 percent. That may sound like a huge loss. But in February, the fund was down 31 percent. “So we made some significant ground since the low point,” Chris Halvorson, an investment officer with the Endowment Fund Investment Board, told the state Land Board. For the month of June, the fund had a tiny, 0.1 percent gain. Another hopeful sign: Through July 20, the new fiscal year (20 days in) showed a nearly 3 percent gain.

The next question is what the annual fund distribution will be to schools and other institutions for the next year. “Based on the information available today, EFIB staff would recommend that distributions be maintained at FY 2010 levels,” the investment board’s report to the Land Board said. The endowment board will examine investment results through the end of July and an updated forecast of land revenues before setting on its final recommendation at its Aug. 12 meeting.