The Trust Principal

The principal, or “corpus,” of the Permanent School Fund (PSF) consists of proceeds generated from Minnesota’s school trust lands, together with the cash and investments credited to the fund. The Minnesota Constitution prohibits the principal from being spent, requiring the state to hold it in trust in perpetuity.

The principal is invested to generate a growing and sustainable stream of distributable income while maintaining appropriate portfolio quality and liquidity. Investment policies enacted in 1997 allow the fund to be invested in a balanced portfolio of equities, fixed-income securities, and cash. Equities provide the potential for long-term capital appreciation, while fixed-income investments provide diversification and a more stable source of current income.

The Minnesota State Board of Investment (SBI) manages the financial assets of the PSF. The equity portfolio is passively managed and seeks to track the performance of the S&P 500 Index. The fixed-income portfolio is actively managed and seeks to outperform the Bloomberg U.S. Aggregate Bond Index. The cash portfolio is actively managed and seeks to outperform the iMoneyNet Money Fund Average.

The PSF’s overall benchmark combines the equity, fixed-income, and cash benchmarks based on the fund’s target asset allocation of 50% equities, 48% fixed income, and 2% cash. The actual asset mix fluctuates over time.

Since 2017, the market value of the PSF has increased from $1.3 billion to $2.4 billion as of March 31, 2026. The fund’s investments generate income from interest and dividends, which is distributed twice each year to Minnesota’s public school districts and charter schools on a per-pupil basis.

Permanent School Fund Value 2017-2026 SBI PSF Performance Report March 2026 

Information on this page last updated 07/24/2026.