By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

RoyalFidelity Merchant Bank & Trust’s matured investment fund has delivered more than $1.6 million in collective profits to Bahamian investors , proving that opportunities exist in rock-bottom markets.

Joseph Euteneuer, its vice-president of mutual funds and business development, told Tribune Business that the 56.38 per cent return delivered over five years by its TIGRS 2 international fund showed why it was necessary for investors to take a long-term approach.

The fund, which launched five years ago with a net asset value (NAV) of 9.5, recovered steadily from the 2009 ‘bottoming out’ of global stock markets to close at 14.8561.

Bahamian investors, who had initially invested $2.85 million in the TIGRS 2 fund, walked away with a collective $4.456 million - a more than-$1.6 million return produced by the recovery in global equity markets and linked indexes.

Mr Euteneuer told Tribune Business that the TIGRS 2 results provided a salutary lesson for Bahamian investors, as it showed that investing when the market was at ‘rock bottom’ could pay tremendous dividends.

He added that it also emphasised the need to invest in stocks with strong underlying fundamentals, and return/growth prospects, as markets would not remain low for ever and these would rise with their recovery.

“It’s very encouraging to get those results, really,” Mr Euteneuer said. “The main message is that if investors can think back to 2009, and what a terrible time it was in terms of global and local investment markets declining, and yet five years we’ve delivered these returns........ It was a great time to get in.

“The takeaway is that no matter how bad things seem on the outside, there are always opportunities. Most investors, though, bail out when markets go down. They get afraid.

“Markets don’ty stay down for ever, and they don’t go up for ever, so investors need to be discerning on when is a good time to invest, as this proves out today,” he added. “When markets have dropped off, it may be a good time to invest.

“For most investors, it’s difficult to understand how you invest. Taking a long-term view is beneficial. This TIGRS proves you can benefit in extremely low markets, and we’re very satisfied with the results.”

The TIGRS 2 invested equally in four stock-linked indexes - the S&P 500; the Nikkei; Emerging Markets; and the EuroStoxx. It delivered an annual average return of 11.28 per cent over its five-year run.

Mr Euteneuer also disclosed to Tribune Business that interest in RoyalFidelity’s proposed “alternative” US$ investment fund, which is set to launch this summer, had to-date exceeded expectations.

“I’ve had more interest in it than I, quite frankly, expected, because even though the strategies are kind of like the index-linked ones we used for the TIGRS, most investors do not understand how it will work,” he said.

“It’s an alternative strategy, so it’s basically a hedge fund strategy. The reason we are considering bringing it out is because levels in the markets seem quite high at the moment, so we are protecting against the downside through a long/short investment strategy.

“I’ve gotten quite a bit of interest, and hope it continues.”