Legacy Fund’s New Investment Policy Sets 46.5% Global Public Equity Allocation

North Dakota Legacy Fund Adopts Global Public Equity Allocation Target of 46.5%

BISMARCK, North Dakota — The North Dakota Legacy Fund, a $14 billion sovereign wealth fund fueled by oil and gas production taxes, has merged its U.S. And international equity allocation targets into a single global public equity benchmark, setting a new target of 46.5% for the asset class, according to an updated investment policy statement approved this month.

The change, reported by Pensions &amp. Investments on April 28, 2026, reflects a strategic shift to streamline the fund’s investment framework while maintaining flexibility in domestic and international weightings. The Legacy Fund, established in 2011, is designed to preserve and grow revenue from the state’s energy sector for future generations.

Structural and Legislative Alignment

The revised investment policy statement (IPS) was approved by the fund’s advisory board to harmonize templates across client funds and align with recent legislative updates. Scott Anderson, a representative involved in the process, explained that the changes were largely structural, adopting a common template used across approximately 28 client funds managed by the state.

“The changes incorporate recent legislation and clarify operational rules, including cash-withdrawal procedures and benchmark guidance for private markets,” Anderson said. The updates were reviewed by the North Dakota Attorney General’s office to ensure compliance with state regulations.

The shift to a global public equity label does not alter the fund’s underlying domestic and international weightings but simplifies reporting and benchmarking. Internally, the fund will continue to manage allocations between U.S. And international markets, though the policy now presents them as a unified category.

Operational Clarity and Private Market Proxies

The updated IPS also introduces new guidance on cash flows and private market allocations. To avoid parking cash in low-yield assets during the ramp-up of private equity commitments, the policy allows public-market proxies to be used as temporary benchmarks. This approach aims to reduce transaction costs and operational risks while private market investments are being deployed.

During the advisory board’s discussion, North Dakota State Treasurer Trevor Beattle sought clarification on how private equity commitments would be proxied in the benchmark. Staff explained that the fund would use public equity indices as placeholders until private market allocations reach their target levels, with quarterly benchmarking adjustments to reflect the transition.

Performance and Broader Context

The Legacy Fund’s investment performance report for February 2026, published by the North Dakota Retirement and Investment Office, indicates that all limited partnership-type investments are reported net of fees, a standard practice for the fund’s investment consultant. The report also notes a benchmark change in October 2022, when the fund transitioned from the MSCI World ex-U.S. Index to a broader global equity benchmark.

The fund’s assets have grown significantly since its inception, driven by consistent inflows from oil and gas production taxes. As of February 2026, the Legacy Fund’s total value stood at approximately $14 billion, making it one of the largest sovereign wealth funds in the United States.

The new global equity allocation target of 46.5% positions the fund to capitalize on opportunities across developed and emerging markets while maintaining a balanced risk profile. The policy change reflects a broader trend among sovereign wealth funds to adopt more flexible and globally integrated investment strategies.

Next Steps and Legislative Oversight

The updated IPS will guide the Legacy Fund’s investment decisions moving forward, with ongoing oversight from the advisory board and state legislators. The fund’s long-term objective remains to generate sustainable returns to support North Dakota’s budgetary needs and economic diversification efforts.

While the policy change does not immediately alter the fund’s portfolio composition, it provides a clearer framework for future allocations and operational decisions. The advisory board’s approval marks the latest step in the fund’s evolution as it adapts to changing market conditions and legislative priorities.