Experienced mutual fund manager Fortress Fund Managers has recorded positive returns across the board for its second quarter ending June 30, 2019, with funds all reaching “new all-time highs” in net asset values (NAV) and total assets.
This was revealed today by Investment Director, Roger Cave during a “Lunch and Learn” session with business media in Fortress’ offices at Carlisle House, Hincks Street, Bridgetown. There, journalists were given some insight into the performance of the funds during the second quarter of the year. This good news was also shared with Fortress investors in its June 2019 Quarterly Report.
The report outlines returns for three of Fortress’ funds – the Caribbean Growth Fund, the Caribbean High Interest Fund, and the Caribbean Pension Fund.
Mr. Cave explained that the year-to-date returns remained strong in most markets where the fund invested, including Caribbean and global stocks and bonds. He added that while the period was not without its challenges, there were also opportunities to see growth. “Here in the Caribbean and around the world there continue to be profitable, growing companies in which to invest, whose shares are still trading at reasonable prices.”
Strong quarter for Jamaica benefits Caribbean Growth Fund
The Caribbean Growth Fund gained 1.9% during the second quarter and is up 5.2% over the past year. The net asset value (NAV) finished June 28 at $6.1238, while the net assets of the Fund were $484 million, up from $460 million this time last year.
These returns were assisted by the fact that Jamaican stocks had another strong quarter. According to Chief Investment Officer Peter Arender, “The Fund’s largest holdings in Jamaica, PanJam Investments and NCB Financial Group, added 16% and 30% respectively and smaller positions such as GraceKennedy also saw gains”. Barbados and Trinidad were little changed during this quarter, showing slight gains on balance, while the Fund’s holdings in Guyana were mixed.
The Fund’s global investments generated positive returns during the quarter as holdings in the U.S., international and emerging markets mostly added between 1% and 3%. Mr. Arender underscored that the valuations and underlying fundamentals of the Fund’s diversified holdings continued to be consistent with long-term returns, while noting that its strategy was simply to focus on investing in good companies at good prices.
The Chief Investment Officer also noted that the Growth Fund’s portfolio was “priced to continue generating what we expect to be meaningful returns in the coming years. It is once again open to lump sum subscriptions so you can add to your investment with us any time.”
Positive Caribbean High Interest Fund returns influenced partly by decline in global interest rates
With regards to the Caribbean High Interest Fund, this gained 1.0% during the second quarter and is up 1.0% over the past year. The net asset value (NAV) of the Fund’s Accumulation share finished June 28 at $1.9771, while the Distribution share finished at $1.0084. Net assets of the Fund were $137 million, up from $133 million this time last year.
Returns were influenced partly by a decline in interest rates around the world during the second quarter, which led to positive returns on most global bonds. The fund manager is keeping the average term to maturity of the Fund’s holdings relatively short, limiting sensitivity to interest rate changes and including inflation-linked bonds as their “unique sensitivities” can be helpful if inflation increases.
The Fund’s corporate bond investments in Barbados generated steady returns during the quarter and Fortress’ recently initiated holdings in select Government of Barbados (GOB) issues also contributed positively. The process of restructuring of the GOB US$ bonds remains a work in progress, but the post-restructuring dust is settling in the domestic market and domestic GOB bonds have once again been listed on the Barbados Stock Exchange.
Caribbean Pension Fund sees gains
The three classes of shares of the Pension Fund rose between 1.1% and 1.7% in the second quarter of the year, gaining between 1.2% and 4.5% over the past year. Equity allocations remained the biggest drivers of return.
Fortress also announced a new, reasonably priced service to assist companies in streamlining management of their pension plans. The Fortress Multi-Employer Pension Plan now offers employers an option that includes management of the day-to-day administration of their plan while still ensuring employees receive a high quality pension product, appropriate resources and reporting.
Fortress manages more than $650 million across 11 different funds with regional and global investments.