BRIDGETOWN, Barbados, Thursday February 21, 2019 – The investments managed by Fortress Fund Managers experienced some choppy waters in the fourth quarter of 2018. However, according to the latest quarterly report, those declines have been offset by a strong start to 2019.
This mixed assessment is contained in Fortress’ December 2018 Quarterly Report which was recently shared with investors. Fortress attributes the 2018 fall off to “one of (the) swiftest drops in years” in global markets.
There is positive news. The decline in global markets and the corresponding lower prices presented Fortress with the opportunity to steadily invest cash in many areas, with a greater potential for higher future gains.
“With excellent value across our global equity investments, we are more constructive on future returns now then we have been in quite some time,” the report stated.
The December quarterly report focuses on the Caribbean Growth Fund, the Caribbean High Interest Fund, and the Caribbean Pension Fund.
The Caribbean Growth Fund saw a decline of 6.6 per cent for the fourth quarter of 2018 and 4 per cent over the past year. The Net Asset Value (NAV) finished December 31 at $5.6868, with net assets of the fund at $447 million, a decline of $7 million from the previous year.
On the Caribbean side, holdings had mixed results as some consolidation took place among regional financial companies. “The huge reductions in Barbados corporate tax rates, however, should be a long-term positive influence on stock markets, increasing company earnings and making the Caribbean jurisdiction more desirable for regional companies,” the report noted.
“Global stocks sold off sharply, bringing share prices to far more attractive levels. As a result the fund added steadily to investments on sale,” it added.
The Caribbean High Interest Fund, which concentrates on income preservation, recorded a small decline for the fourth quarter of 0.5 per cent and 2 per cent over the past year. The NAV of the Fund’s Accumulation share finished December 31 at $1.9278 while the Distribution share finished at $0.9832. Despite this decline, the net assets of the fund were $132 million, up from $129 million for the corresponding period in 2017.
“While a negative return is never cause for celebration, we are pleased the fund preserved its value over a very difficult year for bond investors in Barbados and globally,” the report stated. It also noted that during the fourth quarter the government of Barbados completed its domestic bond restructuring. This comprised a bond exchange which “resulted in losses for many bondholders, in some cases significant ones, but it has given the government a much-needed ease in interest and principal payments as it restructures its finances.”
The three classes of shares of the Caribbean Pension Fund declined between 1.3 per cent and 5.2 per cent in the fourth quarter, with a decline between 2.2 per cent and 3.7 per cent over the past year.
“Stocks fell in the fourth quarter while bond prices were little changed. Global financial markets continue to grapple with rising interest rates and trade tensions.”
The report noted that pensions continue to be an attractive mechanism to save for the future and reiterated calls for the reinstatement of tax allowances for individuals’ pension contributions: “We hope this will be done soon to remove the double taxation of Barbadian retirement savings.”
Fortress manages more than $650 million across 11 different funds with regional and global investments.