Catastrophe bond investment funds turbo-charge post-Ian rebound in April

Pure-play cat bond investment funds charged another 1.5% forward in April for dollar-denominated classes, putting the asset class nearly 9% above the lows hit shortly after Hurricane Ian.

The 1.5% gain for the key dollar-denominated index came in ahead of a 1.3% gain for the euro-denominated measure and 1.1% for the Swiss-franc denominated index, the weekly set of data compiled by Plenum Investments shows.

On that type of continuing underperformance, the EUR- and CHF-indexes have yet to regain pricing enjoyed just prior to the landfall of Hurricane Ian and have advanced less than 7% from the market bottom.

The US dollar fund market has advanced every week since early December and for all but two of the weeks since Hurricane Ian first took some 6.6% from readings over the first ca. three weeks after impact on the Florida coast.

Momentum appears to be picking up for the USD-denominated fund index. The 1.5% April gain is the strongest monthly performance since the initial relief rally in November.

The array of total return performance indexes, published weekly by Plenum Investments, are built on valuations of 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.

The array of core indexes across currencies had been down 6.3 to 7.3% in the weeks following Hurricane Ian on early assumption that underlying securities would suffer notable trapped capital. Views began to ease quite quickly as investors identified an array of loss-free issuance.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.