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Minnesota Permanent School Fund

United States · North America · Sub-national permanent fund · Not an IFSWF member

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Focus

Minnesota Permanent School Fund: what it invests in

Public equitiesFixed incomeCash and money markets

Geography Mainly domestic

Scale

Minnesota Permanent School Fund: how big it is, and on what basis

USD 2.40B (31 March 2026)
Fund market valueAs of

In US dollars: about USD 2.4B. Reported in USD

1-year return 11.4%

Transparency

Minnesota Permanent School Fund: what it publishes

6.5 of 10 Band 4 of 5

Published 5 · Partly 3 · Not published 2

Our 10 item score. It measures what is public, not how well a fund is run.

Market valueS3
USD 2.40B (31 March 2026)
As of
1-year returnS3
11.4%
As of
10-year returnS3
8.3% a year
As of
Paid to schools, 2024-25S1
USD 60.3M
As of
Trust land heldS1
2.5M acres (plus 1M acres of mineral rights)
As of
Target mixS1
50 / 48 / 2 (equities, bonds, cash)
As of
Transparency scoreS3
6.5 of 10
As of

At a glance. The Minnesota Permanent School Fund is a constitutional trust whose principal can never be spent; only its interest and dividends go to public schools. Land sales, timber, leases and mining royalties from school trust lands flow in each month. The State Board of Investment manages USD 2.40B (March 2026) in a 50/48/2 mix of S&P 500 index equities, bonds and cash. S1 S3

Key points

  • Returned 11.4 percent over the year to March 2026 and 8.3 percent a year over ten years, slightly ahead of its benchmark. S3
  • Target mix of 50 percent equities, 48 percent bonds and 2 percent cash has been in place since 1997. S1
  • Equities track the S&P 500 through Mellon; bonds are run actively by PGIM, both since December 2017. S3
  • Paid USD 60.3M of earnings to schools for September 2024 to August 2025. S1
  • Semi-annual payouts rose from USD 18.5M in 2020 to USD 30.8M in 2025. S1
  • Earnings are shared among school districts by average daily membership. S1

Interesting facts

  • Before fiscal 1998 the whole fund sat in bonds. S1
  • Minnesota was granted over 8.1 million acres for schools and still holds about 2.5 million. S1
  • A 2024 task force was set up to review how its earnings are paid out, reporting by January 2026. S1

Mandate and goals

Secure the maximum long-term return from school trust lands under fiduciary duties, keeping the principal intact forever. S1

  • Produce yearly distributions for Minnesota schools. S3
  • Keep the fund as a perpetual resource. S3
  • Grow spendable income while keeping quality and liquidity. S1
  • Return target: Beat a composite of 50 percent S&P 500, 48 percent Bloomberg US Aggregate and 2 percent T-bills S3

How it invests

Industries. Sector agnostic S3
Asset classesPublic equities, Fixed income, Cash and money markets S3
StagesPublic markets S3
GeographyMainly domestic. US equities and bonds S1
Direct / through funds / co-investNo / No / No S3
Managed in house0 percent S3
Ticket sizeNo private deals S3
External managersMellon (S&P 500 equity index) and PGIM (core fixed income) since 1 December 2017; previously run by SBI staff S3
Co-investment programmeNone S3

Asset mix: Equities 49.8%, Fixed income 48.2%, Cash 1.9% (as of 2026-03-31) S3

Published criteria

  • Principal must stay intact; only interest and dividends are paid out. S1
  • Disciplined rebalancing to the target mix. S1

Past investments

The fund has not published a list of investments.

Case studies

Moving from bonds to a balanced mix S1

  • What: After the SBI presented scenarios, the legislature moved the fund from all bonds to 50 percent stocks, 48 percent bonds and 2 percent cash.
  • When: 1997
  • Size: Whole fund
  • Why: Bonds maximised current income but limited long-term growth.
  • Outcome: Ten-year return of 8.3 percent a year to March 2026.

Growing payouts to schools S1

  • What: Twice-yearly certified earnings transferred to the School Endowment Fund.
  • When: 2020 to 2025
  • Size: USD 18.5M to USD 30.8M per half year
  • Why: Rising principal and income from land proceeds and markets.
  • Outcome: USD 60.3M distributed for September 2024 to August 2025.

Investment process

The State Board of Investment invests the corpus; Minnesota Management and Budget oversees the fund and transfers earnings; the DNR manages the lands and a school trust lands director acts as fiduciary. S1

CommitteeRole
Legislative Permanent School Fund CommissionReceives reports from MMB, DNR and the director S1
  1. DNR deposits net land proceeds each month. S1
  2. SBI certifies interest and dividends each March and September. S1
  3. Education department apportions earnings to districts. S1

How to approach: Office of School Trust Lands, 500 Lafayette Road, Saint Paul; SBI hires managers. S5

Size and returns

  • Headline size: USD 2.40B (31 March 2026) (Fund market value, as of 2026-03-31) S3
  • In US dollars: about USD 2.4B. Reported in USD
  • Return, Year to March 2026: 11.4 percent (benchmark 11.0 percent) S3
  • Return, 3 years to March 2026: 11.3 percent a year S3
  • Return, 5 years: 6.5 percent a year S3
  • Return, 10 years: 8.3 percent a year S3
  • Size over time (USD billion): 2024-06 2.1, 2026-03 2.4 S1 S3

Leadership

The fund does not publish named leaders.

Governance and transparency

  • Legal basis: Minnesota Constitution Article XI, Section 8; M.S. 11A.16, 127A.31 to 127A.33 S1
  • Oversight: Commissioner of Management and Budget, with reports to the Legislative Permanent School Fund Commission S1
  • School trust lands director must act as a fiduciary under 2023 changes. S1
  • DNR reports on land management every two years. S1

Transparency score: 6.5 of 10 (band 4 of 5). Our own 10-item rubric; see the methodology page.

  • Published: total assets, annual return, asset allocation, governance and mandate documents, regular reporting schedule. S1 S3
  • Partly published: long-term returns, audited financial statements, named leadership. S1 S3 S4
  • Not published: geographic or sector split, holdings or deal list. S3

History

DateEvent
1997Legislature sets the 50/48/2 target. S1
2017-12-01Mellon and PGIM take over mandates. S3
2023Director duties clarified in law. S1
2024Task force on earnings distribution created. S1
2024-06-30Market value reaches about USD 2.1B. S1
2026-03-31Market value USD 2.40B. S3

For family offices

The fund holds index equities and bonds through external managers and has no private markets or co-investment activity. S3

Reports

Common questions

How big is the Minnesota Permanent School Fund?

USD 2.40B at 31 March 2026. S3

Who invests it?

The Minnesota State Board of Investment. S1

Can the principal be spent?

No. Only interest and dividends go to schools. S1

What has it returned?

8.3 percent a year over ten years to March 2026. S3

Where does its money come from?

Mining royalties, timber and land sales and leases on school trust lands. S1

All sovereign wealth funds in North America · All sub-national permanent funds · All funds in United States

Sources

  1. S1Minnesota Management and Budget, Permanent School Fund report, Sept 2024 to Aug 2025
  2. S2IFSWF, our members
  3. S3Minnesota State Board of Investment, comprehensive performance report Q1 2026
  4. S4Office of School Trust Lands, home page
  5. S5Office of School Trust Lands, contact page

Disclaimer

Informational only. SovereignWealthFunds.com is an independent public-source reference. It is not affiliated with or endorsed by any fund named on it, and it is not investment, legal or tax advice. Figures are as of the dates shown next to them and may have changed; please read each fund's official pages, linked on its profile. To report an error, use the contact page. Copyright SovereignWealthFunds.com. All rights reserved.

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