The Alaska Permanent Fund Corporation (APFC) has selected the FTSE RAFI US 1000 Index as the benchmark index for an approximately $1 billion allocation to U.S. large and mid-cap investment.
The APFC was created in 1976 to conserve a portion of the state's revenue from mineral resources, namely oil. The fund now has over $34.7 billion in assets, making it the 18th largest sovereign wealth fund globally.
The FTSE RAFI US 1000 Index weights index constituents by fundamental value rather than market capitalization. A constituent’s fundamental value is determined by four factors: dividends, cash flow, sales, and book value. Part of the FTSE RAFI Index Series, the US 1000 Index is based on methodology developed by Research Affiliates Inc.
APFC has named Mellon Capital Management Corp. to manage the approximately $1 billion mandated allocation to the FTSE RAFI US 1000 as part of its indexing relationship with the investment firm, according to a FTSE news release. The mandate was funded from the AFPC’s S&P 500 and S&P 400 mandates, also managed by Mellon Capital.
FTSE, an independent company jointly owned by The Financial Times and the London Stock Exchange Group, calculates and manages equity, fixed income, real estate, and investment strategy indexes on both a standard and custom basis. FTSE has offices on four continents and works with investors in 77 countries.
Read about the FTSE Diversification-Based Investing Index Series on AdvisorOne.com.