Cat bond fund news

The overall yield of the catastrophe bond market rose as the market repriced positions in the wake of recent hurricane Milton, but like other market indices and the performance of cat bond funds themselves, the effect of the storm has been quickly overtaken by continued positive market momentum.

With catastrophe bond market returns remaining elevated, the cat bond market index calculated by Swiss Re Capital Markets rose again in the last week, regaining all of the decline seen from hurricane Milton and more, to now stand 0.25% higher than when that storm hit.

Catastrophe bond funds in the UCITS format grew strongly in recent months, adding approximately 7% in assets during the third-quarter of 2024 to take their combined assets under management to a new record high of almost $13.05 billion.

The Ambassador US mutual catastrophe bond fund strategy operated by advisor Embassy Asset Management has continued to attract inflows from investors through the Atlantic hurricane season, reaching more than $329 million in assets under management (AUM) this month.

Twelve Capital, the Zurich-headquartered insurance-linked securities (ILS), catastrophe bond and reinsurance investment manager, has reached a new milestone in terms of third-party assets under management, surpassing $4 billion for the very first time across its cat bond and ILS portfolios.

With another week of insights gathered on the potential for any losses from hurricane Milton, thanks to industry loss estimates and catastrophe bond pricing, the net asset values (NAVs) of US mutual investment funds that allocate to catastrophe bonds and other insurance-linked securities (ILS) were mostly marked up again at the end of last week.

It’s now clear that catastrophe bond funds fell far less than the market benchmark on the first pricing after hurricane Milton, with the Plenum CAT Bond UCITS Fund Indices only falling 0.42% at Friday October 11th and the majority of cat bond funds absorbing the initial mark-to-market impacts of the storm within two weeks of […]

At Friday’s pricing, the catastrophe bond market index calculated by Swiss Re Capital Markets bounced back by more than one percent, leaving the benchmark for the entire cat bond market now only -0.30% down since hurricane Milton, while the US wind specific version of the cat bond index also recovered and is now -1.31% since […]

Highlighting the still wide-range of uncertainty in insurance market loss estimates after hurricane Milton, catastrophe bond investment manager Icosa Investments AG has noted that the cat bond market seems not to have discounted prices as widely to account for uncertainty this time.

So far, based on analysis of the catastrophe bonds in the UCITS structure that have priced their net asset value (NAV) since hurricane Milton struck Florida and where we have been able to access that data, the average mark-down across the funds is just -0.77%.