Cat bond funds rise uninterrupted through August, up 10.8% YTD

Pure-play cat bond investment funds advanced in August on five consecutive weeks of uninterrupted gains, taking the winning streak to 39 weeks since the market bottomed out after hurricane Ian.

A key dollar-denominated market index for cat bond funds rose 1.6% for the five weeks ending September 1, ahead of a 1.4% gain for a EUR-denominated and 1.2% for the CHF-denominated measures, all roughly twice the rate of the prior month's gains, a weekly index of bond fund pricing compiled by Plenum Investments shows.

The 0.56% surge in the last week of August, the 39th consecutive week of gains, the fourth strongest weekly gain in the year to date and the best week since points at the turn of May and June. Ultimately gave the market its best month since April.

The cat bond rally has now taken the USD-denominated index 14.2% above the lows in the weeks following Hurricane Ian's late-September landfall. Valuations are now 6.7% above pre-landfall levels.

Secondary market gains in 2023 have come despite record levels of issuance in the first half which market data has suggested increased nominal outstanding sums in excess of $3 billion. That all came ahead of a traditional third quarter lull in issuance.

The array of total return performance indexes, published weekly by Plenum Investments, are built on broker quotes for a group of 15 pure-play cat bond UCITS investment funds. Sub-indexes divvy up results by currency unit class and a classification of risk profile subject to semi-annual review.

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