Disaster bond fund methods within the UCITS format averaged constructive returns for the month of January 2025, regardless of the consequences of wildfire associated mark-downs to uncovered positions, in line with the most recent knowledge from the Plenum CAT Bond UCITS Fund Indices.
As we had reported earlier than, the Los Angeles, California wildfires had already had a minimal effect on the UCITS cat bond fund cohort earlier in January.
We had estimated the write-down across the cat bonds tranches with more meaningful price movements at around $200 million, after the January seventeenth marks.
However, as we reported final week, additional price declines were seen in the secondary marks made at the end of last month.
Leading to the first ever negative January for the cat bond market benchmark, the Swiss Re Index.
Nevertheless, with the variety of bonds affected nonetheless solely a comparatively small proportion of the excellent disaster bond market, the vast majority of cat bond funds have been constructive for the month of January 2025.
Which learn throughout to the UCITS cat bond fund methods, which we are able to now report averaged 0.49% for the month of January, for the reason that final calculation level of the Plenum CAT Bond UCITS Fund Indices within the prior yr.
The reason is, that disaster bond funds are persevering with to learn from vital coupon returns which have outpaced the market-wide influence of the current devastating California wildfire.
The impact of the wildfire associated cat bond value mark-downs are extra evident should you take a look at the Plenum Index over a shorter interval.
Should you extrapolate out the Index returns over the calculation factors between the most recent in December 2024 and first in January 2025, it offers an approximate full-month return for January 2025 of 0.25%.
For the reason that first Index calculation level of this yr, at January third 2025, the UCITS cat bond Index return to January thirty first was a nonetheless constructive 0.08%.
For the trailing yr, to January thirty first 2025, the typical UCITS cat bond fund return, in line with the Index, remains to be working at a really wholesome 12.48%.
The Low-Danger common return, for UCITS disaster bond funds with a decrease anticipated loss, was 12.10% throughout the trailing yr, whereas the Excessive-Danger UCITS cat bond fund index averaged 12.80%.
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.
