ILS fund performance continues to rise in 2026, average July return hit 1.05%: ILS Advisers

The performance of insurance-linked securities investment fund strategies, across catastrophe bonds and private ILS, has continued to rise through July 2026 with the month delivering the best returns of the year so far for the asset class, as measured by the ILS Advisers Fund Index.

For July 2026, ILS Advisers reports the average return across its index constituents was 1.05%, the best month of the year to-date and the strongest month since October 2025 for its Index.

This strong July average ILS fund return has lifted performance for the first seven months of 2026 to 5.12% for the Index.

With no major catastrophe or other insured loss events that impacted insurance-linked securities funds in the period, ILS Advisers does not anticipate the Kumamoto, Japan earthquake during the month having an impact, it continues the relatively loss free year we’ve seen in 2026 so far.

Once again, every ILS fund reporting its performance to the ILS Advisers Index so far for July was positive, making it now the fourth month in a row where all reporters generated positive returns for their investors.

Both pure catastrophe bond funds and the funds that also invest in private ILS, such as collateralised reinsurance arrangements, had strong performance in July.

ILS Advisers said that, “Pure cat bond funds as a group posted a 0.95% gain for the month, while funds incorporating private ILS strategies were up by 1.23% on average.”

The range of returns reported was also indicative of a very strong month for the ILS fund marketplace, as the worst performing fund delivered a 0.45% return and the best-performing a much stronger 2.88% for July 2026.

With these ILS funds now averaging 5.12% after the year to July, this figure is likely to head into the 6%+ range once August’s data is in.

August has again not seen any major catastrophic events that would be expected to derail cat bond and ILS fund performance, so we can expect to see returns continue to be very positive given the seasonal premium accrual that occurs at this time of year.

You can track the ILS Advisers Fund Index here on Artemis. It comprises an equally weighted index of 37 constituent insurance-linked investment funds which tracks their performance and is the first benchmark that allows a comparison between different insurance-linked securities fund managers in the ILS, reinsurance-linked and catastrophe bond investment space.