Investment opportunities still available

Officials of leading investment firm Fortress Fund Managers say they continue to see a number of opportunities despite ongoing uncertainty in some markets and economies that continue to struggle to bring the COVID-19 pandemic under control.

This comes as the Barbados-based manager of mutual funds reported positive returns for the third quarter ending September 30, and continued favourable returns for October and November.

Managing Director of Fortress Fund Managers Roger Cave said the period ending September 30 was a good one for the company, with the Growth Fund increasing by 2.1 per cent, High Interest Fund increasing by 1.5 per cent to reach 3.2 per cent year on year, and its Caribbean Pension Fund gaining between 1.2 and 1.5 per cent.

“So it was a solid quarter for us. Our fund performance has been driven, as expected, mostly by our global investments, where two-thirds of our portfolio in our Growth Fund is invested internationally, and 49 per cent of our High Interest fund is invested into that. So those are the investments doing the heavy lifting, resulting in the positive performance,” Cave told a recent virtual lunch and learn session.

“The Caribbean, unfortunately, continues to lag, and as expected our Caribbean investments were actually down during the quarter,” he said.

“I would say coming out of the quarter we have done better since then, in October and November, but Fortress still see lots of opportunity going forward.”

The Caribbean Growth Fund added 6 per cent in returns since the close of the third quarter in September.

Cave told journalists he expected recovery to take some time, adding that a lot of that will depend on a COVID-19 vaccine.

At the same time, he said clients were continuing to add to their investments with Fortress.

“We have been very encouraged and somewhat surprised that even through the worst parts of this in March and April, a number of our clients were continuing – those in monthly savings programmes and pensions – and they have done very well during that disciplined saving.

“A number of people used the opportunity of the declines to add to their holdings and they have been well rewarded thus far and I think that will continue,” Cave said, adding that with the commercial banks still offering a zero per cent return, people were looking elsewhere to invest.

He said the company was concerned that opportunities in the region continued to be limited, adding that he was still looking forward to the establishment of a regional stock exchange.

“It has been discussed and talked about for many years. It would be wonderful to see it become a reality, so we look forward to that,” Cave said.

Meanwhile, Chief Investment Officer of Fortress Fund Managers Peter Arender also shared the view that opportunities still exist, despite continued uncertainty brought on by the COVID-19 pandemic.

“As we look around at the kinds of investments that we have around the world, we still see plenty of opportunity and well-valued, well-run profitable businesses who we think still have plenty of long-term upside from here,” said Arender.

He said while there were “pockets” of companies in Jamaica that “look interesting”, in the case of Barbados, there was not a lot to choose from.

“You do have some real fundamental headwinds facing people, Government and companies here in Barbados. It doesn’t mean the headwinds will last forever, but it does mean the pressure on equity prices here is completely rational and understandable,” said Arender.

“If we then move to Trinidad, we have been finding a bit of interest there.”

Arender said Fortress would continue to be “very selective” of the investments it makes in the Caribbean, adding that careful research was required before investing.

Though stressing that it was difficult to predict future investment climate, Arender said he expected the earnings of economies and companies to gradually recover over the medium-term.

“I think you are going to see a gradual return to normal life,” he said, adding that he was expecting a “new form of uncertainty” in the future.

Fortress Fund Managers currently manages approximately $700 million across 11 funds with regional and global investments. (MM)