Fortress Fund Managers focused on minimising losses in 2023

As investment funds continue to face strong headwinds in capital markets across the world, one of Barbados’ leading mutual fund managers is promising to focus on building greater portfolio resilience in an effort to minimise losses.
Chief Investment Officer of Fortress Fund Managers Peter Arender acknowledged that 2022 was a challenging year for investment funds, but said his company was focused on making its portfolios more resilient through diversification and investing in high-quality assets at “good prices”
“Our operation is about trying to find undervalued, well-valued securities that are high quality. I think in the current circumstances, what we are focusing on is how to build as much resilience as we can into the portfolios by owning different kinds of securities that will do better in different kinds of scenarios. So good assets at good prices and well diversified,” he explained.
Though insisting that it was difficult to predict the future performance of the capital markets, Arender said it was expected that returns on just about any investment would be better this year as inflation continues to moderate.
“Bonds may not be great again but they are pretty good again. So that is something to bear in mind relative to cash and other things,” he told the Fortress Fund Managers investment forum earlier this week.
“We are finding great stocks to buy in the US, Europe, Japan and the rest of Asia. There are some in the Caribbean but not as many,” Arender added while indicating that risks in the region continued to rise.
Investment analyst Rashada Lopez noted that the company’s performance for last year was greatly impacted by the continued effects of the COVID-19 pandemic, the ongoing war in Ukraine, and the changes in US monetary policy.
Giving an overview of the company’s performance for last year, she noted that the Caribbean Growth Fund, Fortress’ flagship fund, was down almost six per cent while the Caribbean High Interest Fund was down almost three per cent.
In addition to the Caribbean High Interest Fund and the Caribbean Growth Fund, Fortress Fund Managers also manages a regional Caribbean Pension Fund.
Its international funds – US-dollar funds – are split into two categories – the Fortress Global Funds and the Fortress World Funds.
“The Caribbean Growth Fund was down by a lot less than our US-dollar fund and that is thanks to diversification working here to protect the Caribbean Growth Fund from the down performance in the global equity market,” reported Lopez.
“Despite our funds performing negatively during the year, our funds were mostly outperforming their relative benchmarks with the exception of our Emerging Markets Fund.”
She said in addition to focusing on less speculative parts of the capital market and seeking out value, one factor that helped cushion the performance of the Caribbean Growth Fund was the holdings in the Guyana market. She said the Jamaican market also had its benefits during the year.
“So the markets really bottomed in the third quarter of 2022 and have since regained some of the ground lost since then. The Caribbean Growth Fund reached its lowest entry year levels in the third quarter of 2022 but since then the markets have recovered somewhat and the Caribbean Growth Fund is trending upwards again,” Lopez said.
She added that inflation moderating and things settling down in the US as it relates to monetary policy during the first three months of this year, resulted in the funds performing relatively positively during that period.
“We saw meaningful gains in the International Equity Fund thanks to the gains in the international currency strength against the US dollar,” she added.
(MM)