Strong stock market returns pushed the income generated by Alberta’s Heritage Fund to a new record high of $2.1 billion, the provincial government said Tuesday.
The government reports that the fund posted a 16% return during its latest year, which is the third highest return for the fund since it was created in 1976, pushing it to $17.5 billion in assets (at March 31 on a fair value basis). The fund’s average annual investment return over the past five years was 12.7%, and its 10-year average annual return is 7.5%.
The year’s net income was $852 million more than projected in the province’s 2013 budget, “primarily due to stronger than expected equity markets during the final part of the fiscal year.”
Indeed, equities earned $1.9 billion, about 81% of the fund’s total income, and more than double the $908 million earned from equities in the previous year. Fixed income investments earned $171 million, down from $254 million the previous year. And, inflation‑sensitive and alternative investments earned $256 million, down from $302 million in 2012‑2013.
All the net income earned by the fund will remain in the fund, the government says; adding that a portion of its assets will be used to support funds and endowments to encourage innovation, support trade apprentices, and provide government with the resources to take advantage of future opportunities.