Amundi US cat bond fund returned 14.27% in year to Oct 31st, AUM growth continues

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Amundi US Investment Management has reported that its Pioneer CAT Bond Fund strategy delivered a 14.27% return in the year to October 31st 2024, while assets under management in the strategy have continued to expand through the end of the year.

amundi-us-asset-management-logoBack in late November, we had reported that Amundi US’ most recently launched dedicated insurance-linked securities (ILS) fund strategy, the Pioneer CAT Bond Fund, had surpassed $500 million in assets under management at that time.

We’re now aware that AUM growth has continued for the manager, with additional funds added to this cat bond strategy by the end of 2024.

First though the last reported period of performance, which is for the 12-months to October 31st 2024.

On this, Amundi US explained that its Pioneer CAT Bond Fund had returned 14.27% at NAV, for the Class Y shares in that period.

That performance beat both its broad-based benchmark, the Bloomberg US Aggregate Bond Total Return Index, which returned 10.55%, and performance benchmark, the ICE BofA 3-Month US Treasury Bill Total Return Index, which returned 5.39% during the period.

“The continued elevated pricing trends associated with underwriting catastrophe risk, along with increased loss retention levels by insurance companies, helped drive the Fund’s positive performance during the period, but there were a few catastrophic events to which the Fund had exposure over the course of the reporting period,” Amundi US said.

On hurricane Helene the manager said, “impact on the event-linked bonds in which the Fund invests is expected to be very limited.”

While on hurricane Milton Amundi US added, “A significant share of the insured losses is likely to be absorbed by the primary insurance companies. The catastrophe bonds held by the Fund tend to remain above these loss levels, which we believe will have a negligible impact on the Fund.”

Concluding on the 2024 hurricane season that, “The Fund’s catastrophe bond investments generally were not significantly negatively affected by the North Atlantic hurricane season.”

At the reporting date, of October 31st 2024, the assets under management of the Pioneer CAT Bond Fund stood at just over $439 million, which represented almost 422% growth in the 12-month period reported on.

But of course the growth in net assets managed in the cat bond strategy had continued, surpassing $500 million at the time of our last article in late November.

Now, we’ve learned that the growth of this cat bond fund strategy has continued for Amundi US into the end of 2024.

The cat bond fund’s net assets had reached just over $582.3 million as of the last NAV reporting, Artemis has learned.

That represents an impressive 288% growth in net assets for the Pioneer CAT Bond Fund since the end of January 2024.

With the catastrophe bond fund strategy growing fast, Amundi US now sees it contributing approaching half of the assets it manages in dedicated insurance-linked securities (ILS) fund strategies.

The other dedicated ILS fund strategy, that allocates to a wider-range of reinsurance instruments, the Pioneer ILS Interval Fund, ended October 2024 with almost $701 million of net assets, although we understand that fell towards the end of the year to almost $662 million.

This strategy that invests across private reinsurance quota shares, collateralized reinsurance and catastrophe bonds, delivered its investors a 17.29% return in the year to October 31st.

Commenting on the performance, Amundi US said, “During the year, the Fund collected a sufficient amount of income to offset a reasonable level of losses and thus providing shareholders in the Fund with what we believe is an attractive return that is not correlated with the capital markets.”

The company reported minor losses from hurricanes Helene and Milton for the Interval ILS fund strategy, saying these were likely absorbed within its attritional or annual loss budgets.

Of course, Amundi US manages more ILS assets than just those held in its two mutual dedicated ILS funds which we are reporting on.

With assets also held in multi-asset strategy funds as well, it means Amundi US’ total ILS assets under management are around the $2 billion mark at this time.

Chin Liu, Director – Insurance Linked Securities and Fixed Income Solutions, Amundi US, is joining our ILS NYC 2025 conference on February 7th as a speaker. You can register for the conference here.

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