Fortress World Funds make gains in Q4 2022 while being down over past year

February 15, 2023 9:30 am

Bridgetown, Barbados, February 15, 2023 – The US$ Fortress World Funds made gains in the fourth quarter of 2022 while being down over the past year, a period that was difficult for both bond and equity investments.

This news was shared with investors recently in the December 2022 quarterly report covering the Fortress World Growth Fund and the Fortress World Fixed Income Fund. Both funds provide direct access to international equity and debt securities markets for investors with U.S. dollars.

World Growth Fund up double digits in fourth quarter

The Fortress World Growth Fund gained 11.5% in the fourth quarter of 2022 as a result of a recovery in global equities and was down 14.4% over the past year.

“As the U.S. Federal Reserve (Fed) continued raising its target rate, bringing it to a range of 4.25-4.5% by the end of the year, governors softened their language about the pace of future hikes. This suggested they may be nearing the end of this rate hike cycle, pausing soon after spending most of 2022 raising interest rates aggressively. This was a significant relief to financial markets that had spent most of 2022 selling off in the face of higher rates. Just as importantly for equity investors, the much-feared drop in corporate earnings did not occur (yet),” the report stated.

Market difficulties occurred “as meaningful challenges led to high volatility and lower prices” but many of these challenges were being overcome. “Supply chains are largely back to normal, and expectations for inflation, interest rates and recession have improved. While the next year will likely bring an economic slowdown, we continue to see very good long-term return potential for the kinds of high-quality, well-valued shares where the Fund invests.”

The net asset value (NAV) or price per share of the World Growth Fund as of December 30 was US $0.9809 while net assets were US $7,064,417. The Fund’s annual compound rate of return since inception in January 2021 was -1.0% per year.

World Fixed Income Fund makes modest gains in Q4 

The Fortress World Fixed Income Fund was up 1.7% in the fourth quarter of 2022 and down 10.1% over the past year after an “unusually hostile” period for bonds. The Fund’s NAV as of December 30 was US $0.8873 and net assets were US $5,055,206. The annual compound rate of return since inception in January 2021 was -6.0% per year.

U.S. 10-year Treasury note yields were little changed during the quarter, moving from 3.83% to 3.88%, but corporate bonds saw their spreads tighten substantially and prices rise accordingly. Corporate bonds rallied 4% or more in the quarter, even as Treasuries were little changed.

“Some of the Fund’s corporate bond positions were called during the quarter and new issuance remained slower than average as higher rates and economic uncertainty sapped demand for new credit,” the report noted.

Looking ahead, the report concluded that an economic slowdown remained likely in 2023, with a recession also possible. “As a result, we still favour the highest quality corporates. While the Fed may now be near the end of this tightening cycle, that does not necessarily mean it is ready to cut rates. But a period of higher interest rates may be welcome news for bond investors who have been starved for yield for more than a decade, as healthy running yields contribute to returns. The average term to maturity of the Fund’s portfolio is now 7.1 years and the average yield is still 4.9%, a good estimate of its medium-term return potential.”

Fortress manages over Bds $800 million (US $400 million) in assets across 12 funds with investments in regional, US, international and emerging markets.


Fortress Fund Managers has developed a reputation of being a trusted manager of mutual funds in Caribbean and global markets. Its slate of funds covers the asset classes of equities and fixed income, providing stellar performances over the years. Fortress is also a leading provider of pension management and administration services to companies of all sizes, and to individuals.