Rochdale sees elevated industry-loss warranty (ILW) demand as mutual fund returns 11.27%

The City National Rochdale Select Strategies Fund delivered a net return of 11.27% for the year ended January 31st 2026 and its investment adviser said demand for industry-loss warranty (ILW) protection has been elevated, leading it to expect promising opportunities for 2026 portfolio construction.

The City National Rochdale Select Strategies Fund is a mutual insurance-linked securities (ILS) strategy focused on industry loss warranties (ILWs) and catastrophe bonds, that invests the majority of its assets into NB RE Ltd., a Bermuda based structure whose origination and management falls to global asset manager Neuberger Berman’s specialist insurance-linked securities (ILS) investment team.

The City National Rochdale Select Strategies Fund allocates its capital to cells of NB RE to gain exposure to ILW instruments and largely index-trigger cat bonds, while the fund itself is a 40’s Act mutual strategy.

Over the last year of record, to January 31st 2026, the City National Rochdale Select Strategies Fund (CNRLX) performed in line with expectations and delivered its investors an annual return of 11.27%, just slightly down on the prior year 11.77%.

Gregg Giaquinto, President of RBC Rochdale, commented, “This year’s performance was the Fund’s eighth consecutive year generating positive, fundamentally non-correlated returns. The 2025 portfolio was defensively positioned in anticipation of an active Atlantic hurricane season. This was largely accomplished through structural customization and concerted efforts to minimize portfolio exposure to “non-peak” perils.

While peak peril losses were lower in the last year for the ILS fund, secondary perils still stood out.

Giaquinto explained, “This year exemplifies the rising impact of frequency perils, with SCS and wildfires making up more than 80% of global insured losses. SCS insured losses totaled $61 billion, which is the third highest on record, and wildfire losses totaled $42 billion, which is over ten times the decadal average. We expect to see both the losses from once “non-peak” perils and the consequent demand for protection continue to rise as exposure growth and climate conditions lead to more property at risk and higher replacement costs for that property.”

Looking ahead, he also commented on prospects for the next year, saying, “The Fund’s portfolio construction process for 2026 is now well underway, and we are focused on diversification and capital-efficient opportunities in the industry loss warranty (“ILW”) and catastrophe bond (“Cat Bond”) markets, where we believe risk-adjusted returns are most attractive. We are excited for the opportunity to further capitalize and source attractive opportunities for our shareholders in the coming months.”

The fund’s investment adviser, further commented, “In terms of expectations for the coming year, demand for 2026 protection has been significantly elevated in the ILW market in the lead up to the January renewal period. Cat Bond primary issuance has also broken records for the third year in a row, as robust new issuance is expected to continue in 2026, further deepening and diversifying the opportunity set.

“With that said, strong demand for protection across both segments of the market is expected to moderate recent price softening. Particularly elevated ILW issuance has allowed for the preservation of favorable structural improvements on negotiated contracts.”

The performance of the City National Rochdale Select Strategies Fund fell behind the Swiss Re Cat Bond Index, one of its benchmarks, but was well-ahead of its other fixed income comparatives.

In terms of assets under management in this ILW and cat bond focused investment strategy, it has not grown particularly quickly over the years but has been on a steady trajectory.

As of January 31st 2026, the City National Rochdale Select Strategies Fund counted total net assets of $234.51 million, up from $228 million a year earlier.

Data seen by Artemis suggests the fund remains relatively flat, in size terms, through the first-quarter of 2026.