In the midst of what it has described as an “unfavourable savings climate“, Fortress Fund Managers is encouraging Barbadians to continue to invest.

Mr. Cave noted that certain events throughout the year had not been favourable to Barbados’ financial climate including the elimination of personal tax allowances on Registered Retirement Savings Plans (RRSPs) and group pensions as announced by Barbados’ Minister of Finance, Chris Sinckler, as well as the removal of the minimum savings rate on deposits in commercial banks and the downgrading of government debt to “B-“.

Mr. Cave noted that Fortress had stated its position on the removal of the tax allowances to its investors as well as lobbied government directly, along with other fund managers. And he reiterated the position that the removal of the allowances without any commensurate changes in the taxation of pension benefits would result in “double taxation”.

Invest to beat inflation

“All around it’s not been a very favourable environment for saving. But that doesn’t remove the need for saving for retirement. I think what people need to do is reduce the balances that they hold in the bank and invest the rest to beat inflation over the long term,” the investment director suggested.

Speaking to the outlook for the region and further afield, Mr. Cave noted that high debt and low growth was being faced in most countries and that this would be a challenge. Internationally, the investment director stated that oil and commodity prices had impacted emerging markets, hurting currencies and stock markets as a result. “We’ve seen central banks trying to get global growth going through quantitative easing and zero interest rate polices. We have bonds (yielding) near to zero, we had Greece all summer in a very tough battle with the EU which is not over yet. Also there’s no question that China is slowing. So we have a world that’s a very challenging environment in which to invest.”

Focus on value investing

Also addressing the forum was Peter Arender, chief investment officer, Fortress Advisory & Investment Services who gave more detail on the performance and outlook for the funds under Fortress’ management. He emphasised that Fortress were “value investors” with a strategy centred on an active, disciplined process that focused on what they paid and what they were getting. “We don’t buy the ‘sexiest’ stocks or bonds…. We are always looking to maximise what we’re getting for what we’re paying. That is where tomorrow’s returns come from,” he explained.

Mr. Arender noted that the funds under Fortress’ management concentrated on diversification within their portfolios to minimise risk and maximise returns. Highlighting what contributed to the returns on the funds, Mr. Arender said the performance of equities held in the US and Jamaica was relatively strong along with some individual stocks held in the United Kingdom and elsewhere. Furthermore corporate bonds owned as part of the Caribbean High Interest Fund “continue to do a good job,” he added.

The chief investment officer also noted several factors which had detracted from the funds’ performance including weakening currencies, and the relative weakness of international and emerging markets.

Regarding risk, Mr. Arender said that Fortress believed that not being aggressive enough was risky, especially for retirement or other long-term savings. He noted that it was important to beat inflation, understanding that sensible risk was required for long-term investment.

The forum concluded with a panel of special guests speaking on: “Financing your future in uncertain times: What could be next for Barbados and what to do about it“. Panellists included David Nagoski, executive director, White Oak Advisory, a financial advisory firm in the UK specialising in sovereign debt and sustainability; Vivian-Anne Gittens, outgoing CEO of the Nation Corporation; and Connie Smith, managing director, Tricor Caribbean. The discussion was moderated by John Williams, CEO Cave Shepherd & Co. Ltd.