Still room for investment – Fortress

Officials of the investment management firm Fortress Fund Managers say there continues to be tremendous opportunity for equity investment despite the impact of the coronavirus (COVID-19) on regional and international investment markets.

And coming off a very strong fourth quarter performance last year and a strong start to 2021, officials say they remain upbeat about the prospects for future investment returns.

Investment Director of Fortress Fund Managers Roger Cave said he was hopeful the favourable performance would continue well into this year, saying “We still think there is a lot of opportunity for continued growth.”

In addition, he said he expected that with the rollout of vaccine, financial markets will start to see some semblance of normalcy.

“Financial markets tend to look forward and they are looking beyond what is happening currently, so they will be looking for a strong recovery in the years ahead as vaccines take hold,” said Cave.

Focusing on its three Barbados-dollar funds performance for the last quarter, the company recently reported to its investors that its global equity investments led the way during the quarter, with bond portfolios also posting gains and finishing a strong 2020 for fixed income investments.

Chief Investment Officer of Fortress Advisory and Investment Services Peter Arender said the prediction was that several key sectors could start to return to normal during the course of this year with full recovery taking a little longer.

“I would suspect the expectations at this moment are a steady return to normal in many, if not most, areas of life in the coming six to 12 months, and maybe a longer timeline for the most hard-hit areas that have to do with things like travel,” said Arender.

While being careful not to make any major prediction as to when there could be a recovery in regional investment markets, Arender said he expected to see “some kind of recovery at some point”.

In relation to global investing, he added, “2020 reminded us how important it is to be diversified globally as you possibly can be, to be steady in your behaviour and if possible, buy things when they go on sale.

“It is important also to decouple what we see in the financial market from what we are experiencing in everyday life because they do not necessarily have to have any resemblance to each other,” he said.

Describing 2020 as an “extraordinary” year, Arender said although there was a “gigantic decline” in the first two months, there was a “huge rally” throughout the rest of the year.

He explained that the company’s global equity investments continued to lead the way in year-to-date performance, increasing between five and nine per cent.

Overall, the Caribbean Growth Fund was up about three per cent year-to-date while the High Interest Growth Fund was flat.

Arender said he expected markets were entering a period that would favour investors far more than in the last few years. However, he suggested more attention will have to be paid to price and valuations.

“There is still plenty of well-valued companies that we think can power returns in the coming years, but those stocks are not everywhere and unfortunately for the overall broad market indexes, some of the biggest companies in those indexes now are also some of the more expensive with what we think are some of the lowest expected returns in the coming years as a result. So I think it is really important in being selective,” he explained

“In terms of equities, we still see substantial opportunities and great companies to buy at very good valuations – in the international markets, in the US to some extent and in the emerging markets”.

He gave the assurance that Fortress would continue to focus on “good companies with good steady earnings, good balance sheets and growing earnings” as it continued to buy at reasonable prices.

“Those are still available and that is not a COVID story. That is an everyday life story. Regardless of what we are preoccupied with and what we were preoccupied with over the last year with the pandemic, companies are getting on with it, and many of them continue to operate and grow their earnings and the more life gets back to normal the more that will happen,” said Arender. (marlonmadden@barbadostoday.bb)