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
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
“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
“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
Fortress manages more than $650 million across 11 different funds with regional and global investments.