For second in a row, ILS Advisers Index records highest monthly return since inception

The broad benchmark index for insurance-linked securities (ILS) funds, the Eurekahedge ILS Advisers Index, has recorded the highest monthly return since its inception in 2006 for the second consecutive month, being up by 1.91% for the month of September 2024.

Just a month ago, this index of ILS fund returns was up by 1.71% for August 2024, now restated to 1.69% after all fund results were in, which beat its previous highest monthly performance record.

With seasonal returns strong through September, the returns generated by ILS funds tracked by ILS Advisers Index rose further, for an average performance for the month of 1.91%.

That took the year-to-date performance of this ILS fund index to 9.60% by the end of September 2024.

While September was an “eventful” month for global natural catastrophe events, such as typhoon Yagi in China and Vietnam, storm Boris’ flooding across central Europe, and of course hurricane Helene in the United States, ILS Advisers said that despite this “ILS funds continue their strong path.”

On hurricane Helene, while the economic loss is expected to be significant, the insurance industry impact appears set to be lower, on which ILS Advisers said, “Helene is therefore expected to have very limited impact on the ILS market.”

September saw a very strong month for the catastrophe bond market, with the Swiss Re Cat Bond Index total return 2.69% for the period.

That helped pure catastrophe bond funds deliver a September 2024 average performance of 1.65%.

But, private ILS funds, so those that also allocate capital to collateralised reinsurance and retrocession deals, gained 2.28% in September, so outpaced the catastrophe bond focused fund strategies.

Every fund that has tracked and reported so far in the in the Eurekahedge ILS Advisers Index was positive for the month of September 2024.

There was a relatively wide range of performance, but all very positive still, with even the lowest return reported being 0.95%, while the best performing ILS fund delivered a strong 2.90% return for the month.

It’s notable that this index of ILS fund performance is now at its third-highest level for any year on-record and with three months of data still to add, it is possible it will get close to a record level of returns for the full-year.

You can track the Eurekahedge ILS Advisers Index here on Artemis, including the USD hedged version of the index. It comprises an equally weighted index of 26 constituent insurance-linked investment funds which tracks their performance and is the first benchmark that allows a comparison between different insurance-linked securities fund managers in the ILS, reinsurance-linked and catastrophe bond investment space.