Catastrophe bond funds within the UCITS format have now delivered round 14% in returns year-to-date on common, whereas their property beneath administration as a bunch had recovered to greater than $10 billion by the tip of October 2023.
The capital-weighted common return of the group of UCITS disaster bond funds tracked by Plenum Investments had reached a powerful 14.4% as of November third.
It places the returns delivered thus far this yr at a degree well-beyond every other, with these cat bond funds prone to set an annual return file that can be arduous to beat in future given the extra efficiency delivered on the again of recoveries of worth of sure cat bond positions after final yr’s hurricane Ian.
You can analyse the efficiency utilizing the Plenum CAT Bond UCITS Fund Indices, which tracks the efficiency of a basket of cat bond funds structured within the UCITS format, supplies a broad benchmark for the efficiency of cat bond funding methods.
By November third, the common return of the lower-risk group of UCITS cat bond funds stood at 13.2% and the higher-risk group was 13.8%, whereas the capital-weighted common reached 14.4%.
This was on the again of a really robust October, when the lower-risk UCITS cat bond funds delivered a return of 1.3% and the higher-risk group 1.8%.
As the chart beneath reveals, which you’ll click on and look at an interactive model of, the one trajectory for the cat bond funds since hurricane Ian final yr has been upwards.
Looking on the rolling twelve month return for the group of UCITS disaster bond funds tracked within the Plenum Investments Index, the low-risk common stands at 14.5%, the high-risk common at 15.8% and the capital-weighted common at 16.2%.
With almost two full months left to include into the Index returns this yr, this UCITS cat bond fund Index goes to set a really robust file.
Turning to the property beneath administration of the main UCITS disaster bond funds, which we monitor right here with the assistance of Plenum knowledge, a return to progress was seen in October 2023.
As we reported in early October, disaster bond funds within the UCITS format skilled some outflows within the third-quarter of the yr, with their mixed property beneath administration falling by 4% or roughly $430 million, to only over $9.95 billion within the interval.
A spread of things prompted that decline, together with foreign money results.
Now, it’s turn into clear that after October was accomplished, the group of UCITS cat bond funds has seen their property return to progress.
The AUM complete recovered to only barely above $10 billion for the group of UCITS cat bond funds, which nonetheless sits a way beneath the file of $10.4 billion that they reached in July.
But that file is prone to be damaged over the approaching weeks, because the very lively cat bond pipeline supplies a possibility for UCITS cat bond fund managers to welcome extra investor flows into their constructions.
Right now, the capital elevating alternative for these cat bond fund managers is powerful, with returns nonetheless extraordinarily engaging and issuance offering ample funding alternatives to soak up any contemporary capital that’s raised.
Analyse UCITS cat bond fund efficiency, utilizing the Plenum CAT Bond UCITS Fund Indices.
Analyse UCITS disaster bond fund property beneath administration utilizing our charts right here.
