The SEF Entropics Cat Bond Fund, the first such catastrophe bond focused investment strategy to be launched in the Scandinavian region, is now available to retail investors with a new share class being made available through Swedish online bank Nordnet.
According to Entropics Asset Management AB, the first Swedish insurance-linked securities (ILS) and catastrophe bond fund manager, Nordnet has become the first distributor to offer the cat bond fund’s retail class to individual investors and pension savers.
“Nordnet aims at offering the widest range of funds, and we can now add Sweden’s first Cat Bond fund to our fund menu. Our customers are continuously searching for new investment opportunities and have also shown great interest in this fund. We are happy to be able to meet that demand,” commented Mr Jan Dinkelspiel, Chief Innovaiton Officer at Nordnet.
Entropics opened the cat bond fund in February 2015 with a first investment from Movestic, beginning to invest in cat bonds in the last few weeks as the manager seeks to deploy its first capital injection.
With cat bonds and ILS, Entropics Asset Management’s aims to offer investors a complimentary asset class for their traditional portfolios, which mainly consist of equity and interest bearing bonds. Making the cat bond fund publicly available, beginning with Nordnet was a conscious choice, as Entropics seeks to diversify its sources of investor capital.
Robert Lindblom, Entropics CEO, stated; “For many years, Nordnet has been the first to offer Swedish private investors easy access to funds and other investment opportunities. Private investors are now provided with additional opportunities to diversify their savings through Cat Bonds, which have little or no correlation to other asset classes and that contribute to a good risk adjusted return in traditional portfolios.”
Lindblom continued; “The Swedish and Scandinavian domestic markets will be Entropics’ primary market for a long time. We communicate with investors in Swedish and have a better understanding of Swedish market conditions than our competitors. One outcome of this is our policy for responsible investments, reflecting the expectations from many Swedish investors.”
The SEF Entropics Cat Bond Fund is a UCITS fund, allowing it to be offered to retail investors through an appropriate share class. While cat bonds should not be seen as a core investment asset class for retail focused investors, as a complementary asset within a balanced and diversified portfolio, ILS has benefits that cannot be found elsewhere.