RF mutual funds boost returns

RF Bank and Trust is reporting increased returns for three Barbados-based mutual funds that have a combined $73.3 million in assets.

The $33 million Premium Income Fund, which is primarily invested in fixed income instruments, gained 2.2 per cent in the fourth quarter of last year, boosting overall returns for 2025 to 5.2 per cent.

This “compares to benchmark returns of 0.5 per cent and two per cent over the same periods”, the report noted.

The $31 million Select Balanced Fund also had an improved performance in 2025, with higher returns from its equity and fixed income investments.

“In quarter four 2025, the fund returned 1.1 per cent, bringing full-year performance to 3.3 per cent. This compares to benchmark returns of 1.2 per cent and 5.7 per cent over the same periods,” the Select Balanced Fund report stated.

Benchmark returns

RF also shared details on the performance of the Strategic Growth Fund, which had $9.3 million in assets at the end of last year from its investments in equities.

“In quarter four 2025, the fund returned 0.6 per cent, bringing full year 2025 performance to 2.9 per cent. This compares to benchmark returns of 1.9 per cent and 9.4 per cent over the same periods,” the fund reported.

The individual reports for the three mutual funds, which are all sub funds of the RF Investment Fund, all highlighted Barbados’ improved economic performance in 2025, calling it evidence of the country’s “firmer economic footing, supported by 2.7 per cent growth in 2025, record tourism arrivals, easing inflation at 0.7 per cent, and unemployment at a multi-year low of 6.6 per cent”.

Reinforcing stability

“Strong international reserves of $3 billion and a primary fiscal surplus helped reduce the debt-to-GDP ratio to 94.6 per cent, reinforcing macroeconomic stability as global market conditions evolve,” RF added.

The Premium Income Fund’s fourth quarter report for last year observed that “fixed income markets posted strong returns in 2025 as borrowing costs fell and investors moved into riskier bonds seeking higher yields”.

“Emerging market debt led the way with a 13.5 per cent return, benefiting from solid economic growth and a weaker US dollar. Latin American bonds were particularly strong as currencies rallied, with the Brazilian real and Mexican peso each gaining over 11 per cent against the dollar,” it stated.

“Corporate bonds returned 10.3 per cent, with currency moves adding 3.2 percentage points to returns for US investors holding unhedged international bonds. US high yield bonds delivered 8.6 per cent, their third straight year of strong gains.

“Government bonds showed mixed performance as concerns about rising debt levels pushed long-term interest rates higher in most countries.”

The Select Balanced Fund report for the fourth quarter of 2025 explained that the fund’s balanced strategy “provided exposure to both global equity markets and fixed income opportunities throughout the year”.

“International equities delivered strong returns, outperforming US markets by 13 per cent, the largest margin since 2009,” it reported.

“Corporate bonds returned 10.3 per cent, with currency moves adding 3.2 percentage points to returns for US investors holding unhedged international bonds. Government bonds showed mixed performance.”

Strong corporate earnings

The Strategic Growth Fund’s fourth quarter report for 2025 shared that “equities around the world finished the quarter higher, supported by the artificial intelligence (AI) boom, strong corporate earnings, and a September rate cut by the [US] Federal Reserve”.

“Markets overcame significant uncertainty in 2025, including tariff announcements that triggered a 19 per cent decline in the S&P 500 before de-escalating trade tensions and AI enthusiasm paved the way for recovery,” the publication stated.

“Technology and communication service benchmark returns led US sector returns for the third straight year, each gaining more than 25 per cent, while robust AI investment supported economic growth.

“The S&P 500 posted its third consecutive year of returns over 15 per cent.” (SC)

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