Amundi US’ Pioneer Cat Bond fund passes $150m AUM, 14.9% 1-year return

Investment manager Amundi US has celebrated the one year anniversary of its newest dedicated mutual insurance-linked securities (ILS) fund strategy, the Pioneer Cat Bond Fund, saying that the strategy has now surpassed $150 million of assets and delivered a 1-year return of over 14.9%.

Amundi US launched its dedicated cat bond mutual fund strategy, the Pioneer CAT Bond Fund, in the first-half of 2023.

The investment manager has been steadily building its assets under the management in the fund, to complement its other insurance-linked securities (ILS) offering, the Pioneer ILS Interval Fund, which allocates to quota share reinsurance arrangements, reinsurance sidecars and private collateralized reinsurance deals.

When we last covered the strategy, the Pioneer CAT Bond Fund had reached $84.2 million in assets, as at October 31st 2023, while delivering an 11.20% net asset value (NAV) return from its launch through to that date.

The first anniversary of the Pioneer CAT Bond Fund was on January 26th 2024 and the manager said it “marked its first year with a return of 14.64%,” since inception, while by the end of that month “the Fund had over $150 million in assets under management.”

Chin Liu, Director of Insurance-Linked Securities, Director of Fixed Income Solutions, and Portfolio Manager of the Pioneer CAT Bond Fund, commented, “Pioneer CAT Bond Fund leverages our firm’s 16-year history of investing in insurance-linked securities, and we continue to believe this asset class is an attractive option for investors looking for potential sources of yield and return.

“CAT bonds have historically exhibited low return correlations to equity and fixed income markets, offering valuable portfolio allocation and diversification benefits.”

Liu also commented on market conditions in reinsurance and for ILS investing, which the investment manager believes remain attractive.

He explained, “Many of the favorable market trends that we witnessed over the past few years, including more demand from the insurance industry for capital relief and elevated spreads of ILS securities, are still firmly in place.”

Jonathan Duensing, Head of Fixed Income, US, at Amundi US, also said, “We have been pleased with the market’s reception for this strategy in its first year.

“The Fund’s asset growth confirms that investors share our view about the potential benefits of this market segment. Investments in insurance-linked securities are a long-standing core competency of our fixed-income team.”

For the Pioneer CAT Bond Fund’s Class Y shares, the 1-year total return reached 14.93% as of January 31st 2024.

Amundi US had around $2 billion of ILS assets under management across its dedicated ILS mutual funds and multi-asset class strategies, as of the beginning of this year.