Pioneer cat bond & interval ILS fund surpass $2.5bn AUM, return 12.82% & 18.66% respectively

The combined assets under management of the dedicated mutual catastrophe bond and insurance-linked securities (ILS) funds managed by the Pioneer Investments team has continued to rise, with the total now over $2.5 billion, while the pure cat bond fund strategy delivered a 12.82% return and the interval ILS fund 18.66%.

Recall that, these are the two mutual fund strategies that have a dedicated catastrophe bond and ILS investment focus. While the Pioneer Investments portfolio management team also invests in reinsurance-linked assets across a range of multi-strategy funds as well, so total ILS AUM under management is higher.

When we last reported on these strategies, they had reached a combined $2.16 billion in total net assets as of the last week of September 2025.

That was roughly a doubling in one year as the strategies grew quickly, having only counted around $1.1 billion in combined AUM in September 2024.

These two dedicated mutual ILS and reinsurance investment strategies combined assets had reached $1.57 billion at April 30th 2025, then $1.92 billion as of July 31st 2025 and grew further to the $2.16 billion by the end of September.

Now, the latest data available to us shows the combined AUM has risen to more than $2.5 billion at this time.

The Victory Pioneer CAT Bond Fund, the firm’s dedicated catastrophe bond investment strategy, continues to be the main growth driver, having reached $1.43 billion in assets in September, but now standing at just over $1.75 billion as of the end of last year.

Back in December 2024, the Victory Pioneer CAT Bond Fund had just $582 million of assets under management, so it has grown by an impressive roughly 200% over a period of around one year.

In its latest annual report, for the year to October 31st 2025, the Victory Pioneer CAT Bond Fund portfolio management team report a strong 12.82% return for that annual period for the Class Y shares in the strategy.

The annual report states that the Victory Pioneer CAT Bond Fund beat its benchmarks soundly, the broad-based benchmark Bloomberg US Aggregate Bond Total Return Index returned 6.16%, while its performance benchmark, the ICE BofA 3-Month US Treasury Bill Total Return Index, only returned 4.34%.

“The continued elevated pricing trends associated with underwriting catastrophe risk, along with increased loss retention levels by insurance companies, helped drive the Fund’s positive absolute performance during the period, but there were only a few catastrophic events to which the Fund had exposure over the course of the reporting period,” the portfolio team explained in the report.

Also noting that, “The Fund’s risk selection process for Victory Capital and the Fund also avoided most transactions with disproportional secondary perils (including wildfire). Therefore, although these California wildfires led to losses within the re/insurance industry, the impact to the Fund was minimal.”

Moving to the Pioneer ILS Interval Fund, which is the other dedicated ILS fund strategy managed by the Pioneer Investments portfolio team, that invests across private reinsurance and retrocession opportunities including cat bonds, quota shares, sidecars and collateralized reinsurance.

The Pioneer ILS Interval Fund had $688.5 million in assets as of July 31st 2025, then grew to almost $728 million by the end of September 2025.

The Pioneer ILS Interval Fund has continued to grow, albeit slowly compared to the cat bond fund strategy, to reach almost $747 million by the end of October 2025 and a little further to $752.2 million by the end of November.

That is now the largest this interval ILS fund strategy has been since the end of 2022.

The Pioneer ILS Interval Fund reported a strong 18.66% return for the annual period to October 31st 2025.

Chin Liu, Managing Director, Director of Insurance-Linked Securities (ILS) and Fixed Income Solutions, and a portfolio manager at Pioneer Investments, a Victory Capital Investment Franchise, explained that the ILS Interval fund’s benchmark ICE Bank of America (ICE BofA) 3-month US Treasury Bill Index only returned 4.34% for the same period.

Commenting on the Pioneer Interval ILS fund’s performance, Liu said, “In our view, one of the main value propositions of the ILS asset class has continued to be that the sources of risk, return and liquidity for ILS investments have remained structurally uncorrelated with those of the vast majority of other asset classes. That characteristic continued to exhibit itself throughout the 12-month period, especially when compared to the volatility in nearly all traditional asset classes. Since inception, the Fund has exhibited little to no correlation to the broader capital markets.”

He added, “During the year, the Fund collected a sufficient amount of income to offset a reasonable level of losses and thus providing shareholders in the Fund with what we believe is an attractive return that is not correlated with the capital markets.”

Discussing the strategy adopted for the Interval ILS fund, Liu said, “We continued to maintain a steady approach that attempted to keep the Fund well diversified* across different regions and perils. We focused on sponsor quality and deal structure, and sought to avoid the riskiest layers of the ILS market. Our goal is to have the Fund broadly reflect the risks and returns associated with the reinsurance industry, collect sufficient premiums to help offset a reasonable level of losses, and to deliver a solid return for the Fund’s investors.

“We typically have not invested the Fund in every ILS deal; instead, we seek to evaluate each investment for what we deem to be the appropriate structure and potential alignment of interest between the Fund and the ceding insurer. We believe this process may allow the Fund to limit potential conflicts of interest. In addition, we believe it could help mitigate the Fund’s exposure to the idiosyncratic risks associated with holding large positions with one reinsurer. We have remained focused on seeking to add value for the Fund’s shareholders through our security selection process, attention to sourcing investments that we believe offer attractive yields, and through management of the Fund’s risk profile.”

Liu went on to explain some of the selective investment choices taken in constructing the Victory Pioneer CAT Bond Fund portfolio, saying, “We have determined that some sponsors have continually underperformed their peers when affected by losses, and so we have sought to avoid investing the Fund in those types of transactions. Additionally, some vehicles, such as catastrophe bonds, have tended to have greater concentration in Florida, and so we have continued to look for the best relative value across all vehicle types, while seeking to maintain peril and geographic diversification within the Fund’s portfolio.

“In addition, we have tended to avoid investing the Fund in aggregate (those that can be triggered by both the severity of a single loss and the frequency of multiple losses) transactions. In recent years, the industry has observed an increase in frequency of events, but not severity. Aggregate transactions have tended to pick up losses from both frequency and severity, while catastrophe models have often displayed better accuracy on evaluating severity.”