Frequently Asked Questions

The Legacy Fund is the principal. Under the state constitution, the Legislature may spend no more than 5% of the principal per biennium, and only with a two-thirds vote of each chamber. The Legacy Earnings Fund is a separate fund established in 2021 that receives distributions from the Legacy Fund and may be appropriated by the Legislature.

Percent of market value (POMV) is a method for calculating distributions from an investment fund. It applies a set percentage to the Legacy Fund’s average market value over a specified period. This approach helps smooth the effects of market fluctuations and makes distributions more predictable. 

The Legacy Fund invests across asset classes that may include equities, fixed income, private credit, infrastructure, real estate and private equity. Each has different characteristics, risks and potential returns.

Equities: Shares in publicly traded companies. Offers potential for long-term growth, with prices that can rise and fall significantly in the short term.

Fixed Income: Loans to governments and companies in the form of bonds, which pay regular interest. Generally less volatile than stocks, though values can fall when interest rates rise.

Private Credit: Loans made directly to privately owned companies by investment funds rather than banks. Typically offers higher interest than public bonds in exchange for less liquidity.

Infrastructure: Ownership stakes in essential physical assets such as utilities, energy, transport, and communications networks. Aims to provide stable income over the long term; not traded on public markets.

Real Estate: Commercial and residential property held for rental income and long-term growth. Not traded on public markets and valued periodically.

Private Equity: Ownership stakes in companies not listed on a stock exchange, held for long-term growth. Less liquid than public stocks and valued periodically.

Diversifying across asset classes helps spread investment risk because different types of investments may perform differently under changing market conditions. Diversification supports the Fund’s long-term investment objectives but does not eliminate the risk of loss.

Each value serves a different purpose. Fund Value is the audited total reported in the financial statements and is used to calculate the earnings distribution. The Performance page shows Invested Assets, the asset base used to calculate investment returns. The Holdings page shows the Market Value of investments excluding cash and derivatives.

The Legacy and Budget Stabilization Fund Advisory Board makes recommendations concerning the Fund’s investment goals and asset allocation. The State Investment Board oversees the investment program, and the Retirement and Investment Office manages the investments in accordance with applicable law and approved policies. Learn more about their roles by visiting the Governance page.

An asset allocation is how an investment portfolio is divided among asset classes, such as stocks, bonds, real estate and private equity. The Legacy Fund’s asset allocation, established in its Investment Policy Statement (PDF, 159.24 KB), targets investments intended to support its long-term objectives.

The Retirement and Investment Office manages the Fund's portfolio in accordance with applicable law, investment policies and approved objectives. Risk management includes diversification and consideration of factors such as market volatility, liquidity and expected returns. Investment risk cannot be eliminated.

North Dakota law provides for an In-State Investment Program that directs a portion of Legacy Fund assets toward qualifying investments in North Dakota. These investments are intended to support the Fund’s investment objectives while directing capital toward opportunities in the state. 

The Legacy Fund’s investment returns are evaluated against benchmarks established by the State Investment Board. These comparisons help assess performance relative to the markets and investment strategies the benchmarks represent. Independent performance reviews provide an additional layer of accountability and transparency.

An investment benchmark is a standard used to evaluate investment performance. It may be a market index or a combination of indexes that represents the types of investments or strategies in a portfolio.

The Legacy Fund’s Market Value changes as investment prices fluctuate, income is earned, and money enters or leaves the Fund. Short-term changes are a normal part of investing and do not necessarily indicate long-term performance.

Not necessarily. Investment returns measure how investments performed over a period. Changes in the Legacy Fund’s Market Value may also reflect contributions, distributions and other cash flows.

Not necessarily. Some Legacy Fund investments are made through broad-market funds or pooled investment vehicles that hold many individual investments. A company may appear on the holdings list because it is part of a broader investment strategy rather than an investment selected individually by the Retirement and Investment Office.

The Legacy Fund invests both directly and through pooled investment vehicles. When it invests through a pooled vehicle, it owns an interest in the vehicle rather than directly owning each underlying security. In those cases, the holdings list may show the investment vehicle instead of the individual companies or securities it holds.

Some investments are in more than one country, such as private funds that invest across North America or Europe, and development banks that lend across their region. These investments are shown under the region that best describes them.

Global: investments anywhere in the world, including the United States. Most are private market funds, such as infrastructure, private credit and private equity funds, whose investments span many countries and change over time.

International: investments outside the United States. They are mainly pooled funds that track developed and emerging stock or bond markets. They may hold small amounts of US cash for day-to-day operations, but their investments are designed to be non-US.

North Dakota: investments made specifically within the state. They are shown separately to highlight the fund’s in-state investments.

Some investments, including private equity, real estate and infrastructure, are not traded on public exchanges. Their values are determined through periodic valuations or appraisals rather than daily market prices, so reported values may be updated less frequently.

Market Value is the value of an investment at a specific point in time. For publicly traded investments, it generally reflects current market prices. Other investments may rely on periodic valuations or appraisals.

An investment’s value can change because of market conditions, company performance, interest rates and other factors. For investments that are not publicly traded, updated valuations may also reflect periodic appraisals or financial information.

The holdings list reflects the investments included in the published data for the specified reporting period. Depending on how investments are held and reported, some underlying securities may not appear individually.