Catastrophe bond funds in UCITS format grow share of market to 27%

Having continued to expand their assets under management in recent months, UCITS catastrophe bond funds as a group have now grown their share of the overall cat bond market to a new high, at 27% of risk capital supplied.

As we reported recently, by the end of the third-quarter of 2024 the cohort of catastrophe bond funds in the UCITS format had grown their combined assets under management to more than $13 billion for the first time ever.

The UCITS cat bond funds added $840 million to their combined AUM over the three months to September 30th this year.

Driving the continued growth of the UCITS cat bond market, has been successful capital raising by cat bond fund managers, as well as the accumulation of coupon earnings which have also helped to bulk out the market.

When we last reported on the share of the cat bond market supplied by UCITS cat bond funds, at the end of the first-half of this year the UCITS catastrophe bond fund strategies were supplying $12.2 billion in capital, which made up 25% of the cat bond market’s outstanding issuance, by Artemis’ measure.

Just three months on, the UCITS cat bond fund strategies have added more than $800 million in new capital, lifting their combined AUM to $13.05 billion, which takes their market share up to 27% as of the end of Q3 2024.

Analyse UCITS catastrophe bond fund assets under management using our charts here.

Impressively, the combined assets of UCITS cat bond funds has now doubled since around the middle of 2020.

This has significantly outpaced the overall growth of the catastrophe bond market, which since that same time has grown by approximately 45%.

Perhaps more impressive still has been the growth of the UCITS cat bond fund strategies over 2024 so far.

UCITS cat bond fund AUM has risen by more than 19% since the end of 2023, to reach its end of Q3 high of $13.05 billion.

Over the same time-frame, the overall catastrophe bond market, as measured by Artemis, has increased in risk capital outstanding by 6%.

As a result, over the last few years, these UCITS cat bond fund strategies have increased their stature in the market and have continued to during 2024 so far.

The growth of the UCITS cat bond strategies is expected to continue, as long as the cat bond market continues to expand.

Investors remain very attracted to catastrophe bond returns at this time, with a key driver being recent historical and improved performance. As a result, these funds and cat bonds overall should remain in favour for investors, which will inevitably drive more inflows.

Reflecting this, the Plenum CAT Bond UCITS Fund Indices have delivered an average return of 10.77% in 2024 so far.

With the catastrophe bond market pipeline now reopened as the US wind season draws to its close and the cat bond market yield remaining at a historically high level, this group of UCITS cat bond funds should continue to grow, at least in-line with the market.

Analyse UCITS catastrophe bond fund assets under management using our charts here.

You can also analyse UCITS cat bond fund performance, using the Plenum CAT Bond UCITS Fund Indices.