The three Barbados dollar funds managed by Fortress Fund Managers (FFM) all experienced “healthy returns” in the first quarter of 2025.

This news was shared with investors recently in FFM’s March 2025 quarterly report for the Fortress Caribbean Growth Fund, the Fortress Caribbean High Interest Fund and the Fortress Caribbean Pension Fund.  It comes against U.S. shares falling while other areas of the global equity market strengthened.

Caribbean Growth Fund gains 3.5% in first quarter

The Fortress Caribbean Growth Fund earned 3.5% in the first quarter and was up 2.2% over the past year due to gains in international and emerging markets shares. This reversed last year’s initial reaction to the results of the U.S. election.

The net asset value (NAV) or price per share at March 28 was $7.7881. Net assets of the Fund were $684 million, up from $657 million this time last year. The Fund’s annual compound rate of return since inception in 1996 is 7.5% per year.

Globally, equities were mixed during the quarter, as the activity following the U.S. election last year was largely reversed. U.S. stocks mostly declined, with shares of large technology companies and financials suffering most including those tied to artificial intelligence (AI) which were rattled by China’s relatively low-cost DeepSeek product.  

FFM reported that “later in the quarter, worries that the new administration’s tariff policies could stall economic growth weighed on investor sentiment and consumer confidence. Companies still reported generally healthy earnings, but the outlook for future quarters became less certain. The broad U.S. stock market declined 5%, while value stocks, where the Fund is primarily positioned, outpaced growth stocks and held in better than the broader market.”

In the Caribbean, share prices were mostly flat to slightly lower in line with recent trends. “Over the past five years, regional stock markets have struggled: Barbados was down 2% annually, and Trinidad and Jamaica each saw average annual declines of 5%. In some instances, the prices of securities in these markets have adjusted to levels that align with their fundamentals. In other cases, the price drops present an opportunity to invest in high-quality companies at more attractive valuations. For the latter, we believe these stocks are now priced for acceptable long-term returns.”

High Interest Fund gains 1.5%

The Fortress Caribbean High Interest Fund gained 1.5% in the first quarter and was up 3.5% over the past year. The NAV of the Fund’s Accumulation share at March 28 was $2.2496, while the Distribution share finished at $1.0754.  Net assets of the Fund were $146 million, up from $144 million for the same time last year. The Fund’s annual compound rate of return since inception in 2002 is 3.6% per year.

During the quarter, U.S. bond markets priced in prospects for slower economic growth and increased risk of recession. “U.S. treasury yields ended the quarter lower, pushing prices up. Yields had risen last quarter on expectations that tariffs and reshoring could be inflationary. This quarter, investors reassessed the fallout as a potentially greater threat to economic growth, prompting a flight to quality,” the report explained.

By the end of the quarter, the U.S. Federal Reserve (Fed) acknowledged that risks to the U.S. economy were tilted to the downside but emphasised they were in no rush to cut rates due to inflation concerns from tariffs.

In Barbados, the local bond market saw the routine issuance of short-term Government of Barbados treasury bills and medium-term bonds. The Fund’s local corporate bonds performed as expected and were unchanged in price. Cash in the Fund declined to 10%.

Pension Fund makes gains of up to 3.3% in first quarter

The three classes of shares of the Fortress Caribbean Pension Fund - Aggressive Accumulator, Conservative Consolidator and Capital Secure - gained between 1.7% and 3.3% and were up between 2.9% and 3.3% over the past year. Global equities and bonds contributed to the performance.

Good returns come after market stress

The quarterly report summarised Fortress’ actions amidst the tariff “noise” in April. “During this time of panic, we were buyers, adding selectively to the equity holdings in the Fortress funds. As we pointed out in a recent note to clients, no one knows what will happen next. But we do know that good returns come after times of market stress, and the important thing is to stay disciplined and focus on long-term objectives.”

Fortress manages over Bds $800 million in assets across 12 funds with investments in regional, US, international and emerging markets.

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