Disaster bond fund returns spiked in August 2024 delivering the very best month-to-month efficiency of the yr for a lot of, as seasonal unfold tightening delivered robust efficiency throughout the market, with the Plenum CAT Bond UCITS Fund Indices averaging a 2.15% return for simply barely over the month.
August was a powerful month of efficiency for the sector and for a lot of disaster bond funds their better of the yr to this point, we perceive.
Even lower-risk cat bond fund methods have usually delivered a 1.85% to 2% return for the month, which is especially spectacular, whereas some higher-risk methods have delivered increased efficiency.
Notice: We’re basing this on date for Plenum’s UCITS cat bond fund index from July twenty sixth to August thirtieth as it is just obtainable by week, so that is very barely over one months returns.
August is now the strongest month of the yr for almost all of disaster bond funds, because the market adopted its normal tightening cycle throughout the hurricane season.
For cat bond fund managers, now we’re within the peak of hurricane season, the subsequent month or two are actually vital to their full-year returns, with any main storm probably the distinction between one other spectacular yr, or one thing decrease.
The Plenum CAT Bond UCITS Fund Indices having averaged 2.15% for the interval of simply over the month of August, has now reached a return of 8.14% by August thirtieth this yr.
That’s spectacular and whereas a bit behind the earlier yr’s tempo nonetheless, as we explained recently there were factors in 2023’s cat bond fund performance which were never set to be repeated in 2024.
Analyse cat bond fund 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 and offers a broad benchmark for the efficiency of cat bond funding methods.
Click on the chart under for an interactive model and index improvement by week.
August returns had been comparatively even throughout the market, with out an enormous dispersion and Plenum’s cat bond fund index displays this, because the lower-risk funds averaged 2.17%, whereas higher-risk averaged 2.13% for the interval we’re analysing. The capital-weighted model of the index solely managed 2.18%.
12 months-to-date, the dispersion of returns turns into clearer, as lower-risk UCITS cat bond funds averaged 7.87% to August thirtieth, whereas higher-risk cat bond funds averaged 8.30%.
Over the trailing 12-months, to August thirtieth 2024, the typical return of UCITS cat bond funds now stands at 12.40%, which whereas decrease than the full-year 2023 common return of 14.88% is just because of the aforementioned clear reasons.
2024 is the second-best performing yr for this Index of UCITS disaster bond funds. It is going to be attention-grabbing to look at how the seasonal contribution performs in September, as by the tip of that month some cat bond funds could be in double-digits for the yr, so long as the hurricane season performs ball.
Recall that, the catastrophe bond market yield potential still sat around the 13.54% mark as of the end of July.
Analyse UCITS cat bond fund efficiency, utilizing the Plenum CAT Bond UCITS Fund Indices.
Analyse UCITS catastrophe bond fund assets under management using our charts here.
Analyse catastrophe bond market yields over time using our new chart.
