Fortress finds reasons for caution
It appears investors will have to look beyond Barbados if they want to get their money’s worth – at least for the foreseeable future.
A leading Barbadian company overseeing millions of dollars invested in companies and financial instruments, including bonds and treasury bills, reported that while “the news in the investment world is not all bad”, caution was now the appropriate word to use when thinking about these types of activities in Barbados and other places, including Jamaica.
Fortress Fund Managers Limited, which is preparing to host its fourth annual investment forum on November 9 at Frank Collymore Hall, outlined the challenges in quarterly reports for its Caribbean Growth Fund and Caribbean High Interest Fund for the quarter ended last month.
The company said while its officials were “continuing to find promising investments in both regional and global markets”, in the current difficult environment they were were also “finding reasons for caution”.
“Now, more than ever, we believe a diversified portfolio is essential,” it advised investors.
In the case of the Caribbean Growth Fund, which facilitates investments in companies, this “gained one per cent during the third quarter of 2013, and is up 0.1 per cent over the past year”.
“The net asset value finished September 30 at $4.6542 per share. Net assets of the fund were $336 million, down $1 million from this time last year. The fund’s annual compound rate of return since inception in 1996 is now 9.6 per cent per year,” the fund managers reported.
They added, however, that investments in Barbados and Jamaica in particular were causing concern, especially compared to their international counterparts.
“We continue to see a wide divergence between performance of international markets and those in the Caribbean, especially in Barbados and Jamaica. During the quarter, the fund’s regional Caribbean investments were mostly flat or down while investments in international markets generally showed positive results. The combined effect was a small gain for the overall portfolio,” the report stated.
It also noted that the Caribbean’s “difficult business conditions are still weighing on stock prices and the limited liquidity is pressuring share price performance” and that based on the performance of the fund’s “significant regional holdings” business and market conditions “remain difficult in the region”.
The company also pointed out that international investments “fared better, led by gains in markets outside of the United States. European and Asian markets rallied over ten per cent, while the US added five per cent to an already very strong year”.
“Overall, the funds’ portfolio of investments is widely diversified by region, by industry, and by issuer. Directly and via the funds we own, it is
a collection of good companies purchased at attractive prices that should together perform well over time. We are finding more and more value among European and emerging markets stocks, many of which are still trading at the same levels as they were three years ago.
The portfolio’s positioning reflects this,” the report said.
Meanwhile, the Caribbean High Interest Fund increased 0.2 per cent during the third quarter of 2013, generated return of three per cent over the past year and increased its net assets by $10 million. (SC)