Fortress Fund Managers (FFM) recorded positive performances in all its funds in the fourth quarter of 2021, continuing an encouraging trend from previous quarters.
Investors received this news recently in the leading fund manager’s December 2021 quarterly report which highlighted its three Barbados dollar funds – “ the Caribbean Growth Fund, the Caribbean High Interest Fund, and the Caribbean Pension Fund.
The report noted that Fortress’ global and regional equities continued to strengthen in the fourth quarter, capping off “a very good year”.
“While markets initially weakened on concern over the spread of the new Omicron COVID-19 variant, they found their feet again and finished the year stronger, reflecting company earnings growth and still very low interest rates,” it added.
The Caribbean Growth Fund gained 2.7 per cent in the fourth quarter and was up 17.9 per cent over the past year. Going forward, Fortress continues “to see very good prospects for the kinds of high-quality, well-valued shares where the Fund invests”.
Globally, equities rallied in October but traded lower in mid-November on concerns over the Omicron variant and the US Federal Reserve’s tapering and rate hike schedule.
As fears of renewed pandemic lockdowns subsided, US stocks rose in December, and bond yields increased.
Yields finished marginally higher for the quarter, and among global equities the US outperformed international and emerging markets, the company said in its assessment.
“Among the Fund’s larger global allocations, the Fortress US Equity Fund and the International Equity Fund returned 7 per cent and 6 per cent respectively,” the report said.
Regionally, the Trinidad index posted a gain of 5 per cent while other major regional indices were down. Massy Group, part of the Trinidad index and the FFM portfolio, advanced 27 per cent over the quarter. Barbados and Jamaica, meanwhile, continued to experience stalled tourism activity for much of 2021.
“Equity markets in these tourismdependent markets may recover following better economic performance in 2022,” the report suggested. The Growth Fund’s net asset value (NAV) per share as of December 31 was $7.4769. Net assets were $629 million, up from $522 million this time last year.
The Fund’s annual compound rate of return since inception in 1996 is 8.4 per cent per year. Its aim remains capital growth over the long term and the Fund uses a value approach to invest primarily in Caribbean and international equities.
The Caribbean High Interest Fund was up 0.2 per cent in the quarter and up 1.3 per cent over the past year.
The net asset value (NAV) of the Fund’s Accumulation share as of December 31 was $2.1303, while the Distribution share finished at $1.0172.
Net assets were $143 million, up from $139 million this time last year.
“Our global fixed income investments via the US dollar Fortress Fixed Income Fund were approximately unchanged over the quarter.
Some of our corporate bond positions were called by the issuers, and we took the opportunity to participate in a few tender offers at attractive yields.
Our small positions in bond alternatives had good returns in the quarter and contributed nicely to the Fund’s overall return,” the report explained.
Closer to home, the Government of Barbados resumed bond issuance, with a five-year, 4.25 per cent note. Fortress noted that while it was encouraged to see the new bond issue, the first since 2018, it was yet to assess the market participation.
“The Fund’s government of Barbados weighting fell from 9 per cent to 8 per cent as we added more Series B at attractive levels to replace Government of Barbados Series F bonds as their final maturity neared.
“Our local corporate bond positions continued to perform well,” said the report. The High Interest Fund’s annual compound rate of return since inception in 2002 is 3.9 per cent per year.
Its portfolio remains as diversified as possible across various issuers, industries, geographies, and terms to maturity while focused on income and capital preservation.
The three classes of shares of the Pension Fund also performed positively, gaining between 0.6 per cent and 2.3 per cent in the fourth quarter.
They were up between 3.8 per cent and 14.7 per cent over the past year with equity investments continuing to outpace returns from bonds. (PR)
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