Investors confident as growth resumes

Officials of Fortress Fund Managers are reporting “solid” investor confidence as they look forward to continued economic recovery in Barbados.

During the company’s regular lunch and learn press briefing on Wednesday, Investment Director Roger Cave said he was satisfied that investor confidence in more long-term instruments continued to grow, especially given the low interest rates being given by commercial banks.

“I think investor confidence is solid,” said Cave.

“I think the sharp declines we saw last March was one of the sharpest declines I remember seeing in financial markets almost any time, and it was a very steep fall, but the recovery has probably been faster than any other in history too.

“I think investors are conscious of that and I think interest rates are extremely low – there are very little to be earned on bank deposits and in bonds as well – so investors know that there is inflation creeping back in and need to generate a return on those savings. Those who have remained confident and looked to the long-term have done very well over the last year,” he explained.

The comments came as the company reported that the financial year ending September 30, 2021, ended on a high for the funds it manages.

It reported that the flagship Caribbean Growth Fund recorded its second highest return since its inception nearly 25 years ago, while the Fortress Caribbean Pension Fund reported up to double digit gains over the past year.

The Caribbean Growth Fund, one of three funds that Fortress manages, was up 25.3 per cent over last year. The company reported net asset value (NAV) per share as of October 1, as $7.13 while net assets stood at $594 million, up from $468 million over last year.

The three classes of shares in the Caribbean Pension Fund gained between 0.6 per cent and 1.5 per cent in the third quarter and are up between 7.2 per cent and 23.4 per cent over the past year.

Meanwhile, the Caribbean High Interest fund was up 0.2 per cent in the third quarter and reported an increase of 3.2 per cent over the past year.

Looking ahead and as economic growth resumes in Barbados, Fortress expects the issuing of bonds to resume.

Pointing out that the Barbados economy was starting to show signs of recovery, Cave said “The first job is for us to get back to pre-2019 levels and then to really get significant economic growth from there, but the indications right now are certainly a lot better than they have been any time since February of 2020.”

However, he again expressed concern about the lack of investment opportunities on the Barbados Stock Exchange (BSE), pointing out that while there have been talks about a regional stock exchange over the past 25 years of Fortress’ existence, it was now time for that to become a reality.

“We would really like to see more listings. It is the biggest challenge we face to find opportunities for investment of our Barbados dollar and we would love more listings,” he said.

Meanwhile, Chief Investment Officer Peter Arender pointed to a “very heartening” response to the company’s US-dollar investment fund.

“We are sort of curious to discover how many investors there are who would be able to make use of these funds. We are in the very early days – we have started the funds, they are operating . . . and we are going to make sure that everything is working smoothly. We really haven’t been marketing them aggressively but people have found us and we are really gratified with the general response,” said Arender.

He said rising inflation was not of particular concern to the investment firm at this time to the point where it needed to alter its investments. However, he cautioned that investors should always “be present to the risk of inflation”.

“It is not a particular concern to us right now, but always, inflation is something to always have in the back of your mind and how you organize your affairs and how you save and invest for the future,” said Arender. (MM)