Fortress Funds continue to record growth: City Forum gives insight for new investors

One of Barbados’ leading investment management companies, Fortress Fund Managers, is recording continuous growth across its funds.

Giving an overview and update on the performance of its funds, Roger Cave, Investment Director, Fortress Fund Managers said that, “There’s been continuous growth in the Caribbean Growth Fund, the Pension Fund and the new Global Funds. All our funds recorded positive returns for the year ended September 30, 2014, so the business continues to grow.” He was speaking at the 5th Annual Fortress Investment Forum, “Finding our way through – Straight talk about your savings and the future“, held recently at the Frank Collymore Hall.

Roger Cave, Investment Director, Fortress Fund Managers reported to investors at the 5th Annual Fortress Investment Forum that its funds had recorded continuous growth.

Roger Cave, Investment Director, Fortress Fund Managers reported to investors at the 5th Annual Fortress Investment Forum that its funds had recorded continuous growth.

Reemphasising the key benefits of investing in Fortress’ suite of mutual funds, Mr. Cave spoke of portfolio diversification: “The investments in both the Caribbean Growth Fund and the High Interest Fund are spread across individual securities, by geography and by types of investments. So with as little as $100 you can achieve instant broad geographical diversification.

In the case of the Caribbean Growth Fund, Mr. Cave reported that it had “significantly outperformed Caribbean indexes, so we’ve added value there. Having monies invested globally has enabled the fund as a whole to outperform the regional markets.”

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Investors and potential investors received an overview of the performance of funds being managed by Fortress Fund Managers in a presentation punctuated with humour.

On the performance of the High Interest Fund, designed to achieve the highest level of income while preserving capital, Mr. Cave noted that, “We’re being very cautious but returns are in the 3 percent range.” With regard to Fortress’ Pension Fund, the Investment Director said that it was a long-term project which was trending in the “right direction”.

New pension alternative introduced

During the year Fortress introduced another pension product – the Income Drawdown Policy, introduced as an alternative to fixed annuities. It offers retirees the option to continue to invest their pension savings and simply “draw down” an income in retirement. They can still purchase a fixed rate annuity at any time they wish, but no longer need to do so immediately at retirement. Instead they retain control over the capital they have built up over the years and also have a better chance of earning a return high enough to keep up with inflation.

Mr. Cave described the new policy as “an excellent option for those who are at or nearing retirement especially with interest rates being as low as they are. This option also offers flexibility in whether to take a full or partial annuity or none at all.”

Also addressing the forum was Peter Arender, Chief Investment Officer, Fortress Advisory & Investment Services. He outlined Fortress’ investment process and the importance of paying attention to the price to earnings (P/E) ratio of shares, the ratio of a company’s share price to its per-share earnings.

Buying investments at the right price

In identifying suitable investments, Arender said that Fortress was highly focused on finding the right price.

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Michael Lashley of Lashley Financial (with mic) said that Barbadians were interested in very high returns but were not willing to take risk. He suggested more education on personal finances. He was speaking as part of the “Straight Talk” segment of the 5th Annual Fortress Investment Forum. Lashley is flanked by other panelists (from left): Roger Cave, Fortress Fund Managers; Doug Armstrong, Art Holdings Inc.; Tracey Shuffler, Barbados Chamber of Commerce and Industry; moderator John Williams; and Rene Delmas, Fortress Fund Managers.

We pay attention to the things that matter and the factor that drives investment returns more than any other thing is price. If you pay the right price you stand a much better chance of getting a good return than if you pay a high price. We’re looking to invest in companies where there’s good growth and good profitability and we’re looking to invest or buy at the best possible price.”

Arender also noted that when looking at the P/E ratio, it was important to distinguish between how good a company was in terms of its operations and products, and how suitable an investment it was. “I love using Amazon and can’t think of a better service but as an investor I wouldn’t want to own any of its shares because it’s not making money right now. Back when it was, the multiples were always too high; you were paying 200 times earnings per stock.”

Rene Delmas, Pension Director and Chris Callender, Portfolio Manager also addressed the forum. They were later joined on stage by a panel of guest experts during the “Straight Talk” session – Tracey Shuffler, Divisional Manager, Goddard Enterprises Ltd. and President, Barbados Chamber of Commerce and Industry; Michael Lashley, Chairman and Chief Executive Officer, Lashley Financial; and Doug Armstrong, Chief Executive Officer, Art Holdings Inc. Moderator was John Williams, a former president of the Barbados Chamber of Commerce and Industry and the Barbados Private Sector Association.

Savings only go so far

Mr. Lashley in his comments on personal finances said that Barbadians were still saving.

But I think we’re challenged by a number of things which go back into our history. Unfortunately, too often some of the limitations we’ve seen before continue to live with us. So for example, many of us wish to save but many people are afraid of investing. So the concern is that while saving will get you a certain part of the way, you really need investing to take you the rest of the way.”

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Peter Arender, Chief Investment Officer, Fortress Advisory & Investment Services said that in finding suitable investments Fortress was focused on buying at the right price.

Highlighting an “interesting phenomenon“, the personal finance consultant said that Barbadians were interested in very high returns but were not willing to take risk.

That is not practical. So one of the great things we could do is to make sure that more financial education is made available so that people become a little bit more comfortable with the need to invest and the challenges associated with not investing, particularly in the long term.”

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