UCITS cat bond fund Index accelerates past 14% YTD. AUM recovers to $10bn

UCITS-format catastrophe bond funds have now generated returns of around 14% on average year-to-date, while their assets under management as a group had recovered to more than $10 billion at the end of October 2023.

The capital-weighted average return of the group of catastrophe bond UCITS funds tracked by Plenum Investments had reached an impressive 14.4% as of November 3.

This puts the returns generated so far this year at a level far beyond any other, with these catastrophe bond funds likely to set an annual return record that will be difficult to beat in the future given the additional performance generated by value recoveries. of some catalytic bond positions after last year’s Hurricane Ian.

You can analyze performance using the Plenum CAT Bond UCITS fund indiceswhich tracks the performance of a basket of cat bond funds structured in UCITS format, provides a broad benchmark for the performance of cat bond investment strategies.

As of 3 November, the average return of the lower risk group of UCITS cat bond funds stood at 13.2% and that of the higher risk group at 13.8%, while the capital-weighted average reached 14 .4%.

This follows a very strong October, when the lower risk UCITS cat bond funds returned 1.3% and the higher risk group 1.8%.

As shown in the chart below, which you can click on and view an interactive version, the only trajectory of cat bond funds since last year’s Hurricane Ian has been upward.


Looking at the rolling twelve month return of the group of catastrophe bond mutual funds tracked in the Plenum Investments Index, the low risk average is 14.5%, the high risk average is 15. 8% and the capital-weighted average at 16.2%.

With almost two full months to build into the index returns this year, this UCITS cat bond fund index is going to set a very strong record.

With regard to the assets under management of the main UCITS catastrophe bond funds, which we track here using Plenum dataa return to growth was observed in October 2023.

Like us reported in early OctoberUCITS catastrophe bond funds saw some capital outflows in the third quarter of the year, as their cumulative assets under management fell 4%, or about $430 million, to just over 9.95 billion dollars over the period.

A series of factors caused this decline, including currency effects.

It is now clear that after the close of October, the UCITS cat bond fund group saw its assets return to growth.

Total assets under management recovered to just over $10 billion for the UCITS cat bond fund group, which remains well below the record $10.4 billion reached in July.

But this record is likely to be broken in the coming weeks, as the very active pipeline of catastrophic bonds provides UCITS fund managers of categorical bonds with the opportunity to welcome more investor flows into their structures.

At present, the capital raising opportunities for these catalytic bond fund managers are strong, with yields still extremely attractive and issuance offering ample investment opportunities to absorb any new capital raised.

Aanalyze the performance of UCITS cat bond funds, using the Plenum CAT Bond UCITS fund indices.

Analyze the assets under management of UCITS catastrophe bond funds using our charts here.

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