Broader investments adopted for ND Legacy FundBISMARCK, N.D. (AP) — Assets from North Dakota's oil tax "Legacy Fund" are now being shifted to the stock market and other investments.
By: Associated Press, Associated Press
BISMARCK, N.D. (AP) — Assets from North Dakota's oil tax "Legacy Fund" are now being shifted to the stock market and other investments.
North Dakota's Investment Board voted Friday to begin building the fund with a broader investment policy. The board, which supervises the Retirement and Investment Office and oversees state and local government employee pension funds, adopted the Legacy Fund advisory board's recommendation from April.
North Dakota voters approved the fund in 2010 and it's been rising faster than predicted with booming oil production. None of the money can be spent until 2017, and even then it takes a two-thirds vote of the Legislature to get into it.
Oil revenue began gushing into the fund only since September 2011 and analysts initially estimated it would have a $618 million balance when the state's current two-year budget period ends on June 30. The fund now has more than $1 billion.
Revenue from the fund has been invested mostly in short-term, low-risk and low-return U.S bonds, guaranteed by government agencies. But annual earnings from the fund, about 1.6 percent last year, barely kept pace with inflation officials say.
The new strategy is estimated to bring an annual return of more than 6 percent.