It’s now clear that disaster bond funds fell far lower than the market benchmark on the primary pricing after hurricane Milton, with the Plenum CAT Bond UCITS Fund Indices solely falling 0.42% at Friday October eleventh and the vast majority of cat bond funds absorbing the preliminary mark-to-market impacts of the storm inside two weeks of returns.
As we reported after the primary pricing of excellent disaster bonds following the hurricane’s landfall in Florida, the Swiss Re Global Cat Bond Total Return Index, that tracks the entire outstanding catastrophe bond market, fell by 1.34%.
As we reported final week, throughout a pattern of UCITS structured disaster bond funds we had managed to supply web asset worth (NAV) info for, the average decline for hurricane Milton was lower at a -0.77% mark-down.
However, we have been additionally informed that some cat bond funds fared even higher, with decrease mark-downs seen.
Now, the weekly knowledge for October eleventh is on the market for the total cohort of cat bond funds within the UCITS format, because of which Plenum Investments AG has up to date its Plenum CAT Bond UCITS Fund Indices.
As hurricane Milton had solely made landfall in Florida late on October ninth, the Friday eleventh pricing of disaster bonds was the primary clear perception into the potential for cat bond market losses from the storm.
UCITS fund managers working disaster bond methods may have marked their positions and NAVs based mostly on this early cat bond pricing.
The upshot was a simply -0.42% motion within the Plenum Grasp Common UCITS cat bond fund index, with declines averaging -0.25% for decrease danger cat bond funds and -0.52% for the higher-risk funds.
Impressively although, wanting again at two weeks of returns for these cat bond fund indices, all are optimistic versus the pricing on September twenty ninth, exhibiting that virtually each cat bond fund has absorbed hurricane Milton’s preliminary mark-to-market affect inside two weeks of returns.
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 gives a broad benchmark for the efficiency of cat bond funding methods.
Click on on the chart beneath for an interactive model and to analyse index growth by week:
Impressively, the typical return for the UCITS disaster bond funds over the closest month, from September thirteenth by means of October eleventh, is a optimistic 0.91% efficiency, which once more demonstrates simply how simply the cat bond market has absorbed the initially anticipated impacts of hurricane Milton.
Actually, the lower-risk cohort of UCITS cat bond funds are up by 1.06% during the last month, whereas higher-risk funds are up by 0.82%.
Yr-to-date, the return of the UCITS cat bond funds now common 10.13% at October eleventh, which is just barely down on the ten.60% return reported every week earlier.
Whereas the 12-month rolling return now stands at a nonetheless very wholesome 12.23% common throughout all of the UCITS cat bond funds, once more exhibiting that hurricane Milton has not dented the attractiveness of this market as a diversifying different asset class.
We anticipate that, given the bounce-back seen in Swiss Re’s cat bond market Index that we reported earlier today, this UCITS cat bond fund centered Index may additionally bounce-back and regain a lot of the preliminary hurricane Milton decline seen.
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.