JOAN BARRON Star-Tribune capital bureau | Posted: Friday, July 25, 2008 12:00 am
CHEYENNE - Calling it "staggering growth," State Treasurer Joe Meyer announced Thursday that the state's investment portfolio grew by $1.5 billion in book value during the past fiscal year, for a new total of nearly $11 billion.
Gross investment income totaled $723 million, an increase of $300 million over the previous fiscal year, for a 70 percent increase.
Over the past five years, income from investments grew from $245 million to $723 million.
The cash yield on the portfolio was 7.4 percent.
The money goes to public schools, state institutions, public services and the state's general fund.
"We are one of the most conservative portfolios in the nation," Meyer said during a news conference.
He credited legislative and state Loan and Investment Board (SLIB) investment policies and broad diversification of investments with 30 percent in equities and 70 percent in fixed income and cash for the growth.
The state's permanent funds have an allocation of about 52 percent in equities and the rest in fixed income and cash.
The Permanent Mineral Trust Fund grew from $3.3 billion to $3.9 billion in the last fiscal year, and returned a cash yield of 9 percent, or $329 million.
That income goes to the state's general fund.
The Common School Permanent Land Fund grew from $1.5 billion to $1.7 billion and had a 9.5 percent cash yield, or $38 million.
That money goes to support K-12 public schools.
"It's yet another windfall," said State Superintendent of Public Instruction Jim McBride, a member of the State Loan and Investment Board along with the governor, Meyer, Secretary of State Max Maxfield and Auditor Rita Meyer.
"Everybody's mad about the price of oil and coal is going up and we're in this magnificent situation of being blessed and cursed at the same time," he said, referring to minerals that are the source of the bonanza.
"If you're going to be in education in any time in history, being in education in Wyoming now is the best," McBride added.
The Hathaway scholarship program has allowed more than 3,000 students into college nearly free of cost.
Wyoming, he added, is the only state in the nation that builds and pays for its own schools.
The state also has moved teacher pay from the bottom quartile to the top quartile nationally. Where schools once got one or two applications for a teaching job, they now get 30, McBride said.
Cash yields on the Hathaway Scholarship and Higher Education Endowment funds were only 4.7 percent.
The return for those two education endowment funds is expected to grow as more money is moved into equities as allowed by a 2006 constitutional amendment that made the two funds permanent, said Michael Walden-Newman, chief investment officer for the treasurer's office.
The amendment allows the endowment fund investments to mirror those of the Permanent Mineral Trust Fund.
The agency also will be shifting more money into conservative international investments - in Brazil, for example.
The 25 active external financial managers are all meeting their benchmarks.
The state paid $16.4 million in fees to the managers in fiscal year 2008, which the Legislature appropriates from the state's general fund.
Meyer said the message from the state report for the average investor is to be diversified as much as possible and be sure investments are underlined by real assets.
"The advice we're getting is to stay invested in real assets - commodities, strong things that have some base value, and stay heavy in cash for a little while until the markets begin to correct," Meyer said.
He said panic selling is driving the market right now but the market eventually will correct itself.
Contact Joan Barron at joan.barron@trib.com or by phone at 307-632-1244.