Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Insurance-linked securities among best performing ‘alternative alternatives’ assets in April


According to data from hedge fund news and information provider Opalesque, ‘alternative alternatives’ investment funds were largely down during the month of April. Their Opalesque A Square Fund Database clocked a general decline of 0.41% over the month. Largely the losses came from commodity sectors among the 699 single and multi-manager funds that they track. Once again demonstrating their lack of correlation to other investment sectors insurance-linked securities are cited as one of the best performing assets during April.

We’ve already highlighted the improved performance that ILS and catastrophe bond investment funds saw during April. The Eurekahedge ILS Advisers Insurance-Linked Securities Index saw its strongest month this year according to insight from ILS Advisers. However it is interesting to hear that they’ve outperformed other sectors which attract the type of institutional investors that the ILS and cat bond space is currently seeing a lot of interest from.

The Opalesque A Square Index recorded a rise of 0.60% for insurance-linked securities funds during the month of April, so achieving above average returns compared to their database of alternative investment funds.

It’s likely that the Opalesque A Square database will contain different funds to the Eurekahedge ILS Advisers Index which is restricted to ILS funds which allocate at least two-thirds of their assets to non-life risk. We’re not sure of the constituent funds in the Opalesque data.

Differences in measurement aside, it’s encouraging to see insurance-linked securities funds reporting positive returns and beating the returns of many other assets which are also considered ‘alternative alternatives’. This further demonstrates to large institutional investors such as pension funds the value that can be gained by having a percentage of their assets invested in ILS and catastrophe bonds.

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