Cat bond funds power past Ian losses by end-Q1 after 17-week rally

Pure-play cat bond investment funds recouped Hurricane Ian losses during an uninterrupted forward march through the first quarter, with a key dollar-denominated market index advancing 4% during Q1 to pass the pre-Ian reading.

EUR- and CHF-denominated index readings have lagged and remain 1.4 and 2% below their pre-Ian readings, the weekly set of index data compiled by Plenum Investments shows.

The key dollar-denominated index 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 from impact.

The recovery may be accelerating; the weekly gain through March 31 proved third strongest since the recovery began.

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.

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