The common return of UCITS disaster bond fund methods was 1.38% for the first-quarter of 2025, in response to the Plenum CAT Bond UCITS Fund Indices. However lower-risk cat bond funds led the best way by averaging 1.50% for the interval as a gaggle, as they often had much less publicity to the California wildfire cat bond mark-downs.
March noticed UCITS disaster bond fund returns reaching their highest month-to-month stage to date this 12 months, because the mark-to-market results of the Los Angeles wildfires had lessened all through final month.
2025 started with UCITS cat bond funds averaging a roughly 0.40% return for the month of January because the preliminary results of the wildfire affected sure cat bond’s pricing, after which efficiency dropped to an average 0.32% return for the month of February, as sure positions wildfire associated mark-downs accelerated throughout that month.
For March 2025, the common return throughout the UCITS cat bond funds tracked by Plenum Investments Index was 0.56%, taking the common return for the first-quarter of the 12 months to 1.38%.
The wildfires continued to maneuver some cat bond positions throughout March, which depressed the general returns nonetheless.
However, whereas the results of the wildfires haven’t been skilled equally, given variations in cat bond fund supervisor technique, it nonetheless seems that the common efficiency throughout lower-risk methods had continued to fare higher.
In March 2025, the lower-risk cohort of UCITS cat bond funds delivered a 0.54% return, whereas the higher-risk delivered 0.58%.
However, throughout the total first-quarter, the lower-risk cat bond funds averaged 1.50%, whereas the higher-risk solely returned 1.24%, ensuing within the common efficiency of 1.38% for the interval.
The common return throughout all of the UCITS cat bond funds for the trailing twelve-month interval to the top of March 2025 was working at 11.12%.
For the lower-risk cat bond funds the twelve-month trailing return stood at 10.94%, whereas for the higher-risk methods it stood greater at 11.22%.
Now, with a few of the wildfire uncovered combination disaster bonds trying as if they could get by their annual danger durations with out seeing precise losses of principal, there’s a likelihood we see some stronger performances because of this.
Nevertheless, we’ve but to see whether or not there’s any effect on cat bond prices from the broader financial market volatility we are seeing at the moment, whereas on the similar time strong demand for cat bond investments and seasonality have been acting as competing forces on catastrophe bond market yields, all of which makes efficiency ranges exhausting to foretell, however absent main disaster occasions the UCITS cat bond fund phase ought to proceed to ship constructive returns.
This week, we additionally reported on UCITS cat bond fund AUM, which has grown 11% in Q1 2025 to reach a new high of $15.3 billion by the end of March.
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 this chart.
