February 25, 2004

Heritage Fund fair value increases to $12.4 billion in Third Quarter
This year's growth reverses losses from the previous fiscal year

Edmonton… The Alberta Heritage Savings Trust Fund saw a total return of $2 billion, with $703 million being transferred to the General Revenue Fund for program spending, since the beginning of this fiscal year. This represents an 18 per cent increase, and results in a net increase to the Fund's fair value of nearly $1.3 billion, completely reversing the loss from the previous fiscal year due to the downturn in the markets.

The Heritage Fund, Alberta's largest endowment fund, continued to grow for the third consecutive quarter, returning 6.3 per cent over the quarter and bringing the Fund's fair value to $12.4 billion as of December 31, 2003.

Along with the sound investment decisions of the government, the Heritage Fund has benefited from low interest rates, improved corporate earnings and increased investor confidence. The consolidated forecast net income for the end of the fiscal year is now $964 million, more than doubling the Budget forecast of $426 million.

"We are pleased that returns to the Heritage Fund have bounced back to recover from any losses experienced last year. We are also pleased that Albertans can continue to benefit from the strong investment income allocated to their priorities through the General Revenue Fund," said Revenue Minister Greg Melchin. "That said, it is important to keep in mind that the Heritage Fund is a long term investment subject to volatility in the short term. It was only a year ago when the Fund was in a very different position."

The Heritage Fund is managed to provide the greatest financial returns for current and future generations of Albertans and keeping the long term focus on investments remains an important consideration.

"I believe the long term perspective contributes to the overall performance of the Fund through both good and bad cycles," said Melchin. "The fact is that over the years the Heritage Fund has earned a lot of income and has helped put the province in the enviable position it is in today. Since 1976, nearly $26 billion in investment income has been allocated to Albertans' priorities including health care, education, infrastructure and debt reduction."

Including the Heritage Fund, Alberta Revenue, manages over $38 billion in investments on behalf of the province.

• Go to Alberta Heritage Savings Trust Fund 2003-04 Third Quarter Report (html; or pdf).

For media inquiries, please contact:

Cathy Housdorff Director of Communications Alberta Revenue (780) 427-5364 or Cell (780) 719-4104 Dial 310-0000 for toll free access outside of Edmonton.

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