ILS Advisers fund index delivers highest Q1 return since 2007

The Eurekahedge ILS Advisers Index that tracks a basket of catastrophe bond and insurance-linked securities (ILS) funds has delivered its strongest first-quarter performance since 2007, returning 3.15% across the first three months of 2024.

For March 2024, the ILS fund Index has delivered a return of 0.85%, which is the third strongest return for that month on record.

However, the 0.85% is only based on almost 61% of the ILS funds having reported for the month so far, so the March and first-quarter total could rise further.

There were no major catastrophe events to derail catastrophe bond and ILS fund performance in March 2024, ILS Advisers reports.

Supply and demand became more balanced in the catastrophe bond market, which served to moderate some of the price rises that were being seen.

Still, pure catastrophe bond funds as a group delivered a return of 0.88% for March 2024.

Which beat the private ILS funds, that invest across collateralized reinsurance and retrocession positions as well, which together averages a 0.80% return for the month.

Every fund tracked by ILS Advisers Index reported positive returns for the month of March.

But, there was still a relatively wide gap between best and worst, with the lowest ILS fund return reported as 0.10% and the highest an impressive 2.17%.

Which shows the diverse range of strategies and risk/return profiles in the ILS fund sector, as well as just how attractive the returns of some of the private ILS strategies have been of late.

As we’d previously reported, the total-return of the outstanding catastrophe bond market for the first-quarter of 2024 reached 4.57%, according to data from the Swiss Re Cat Bond Performance Indices.

While, catastrophe bond funds structured in the UCITS format delivered their investors an average return of 3.65% for the first-quarter of 2024, according to the Plenum CAT Bond UCITS Fund Indices.

However, as we also reported, when it comes to investment strategies that can be truly diversifying, versus broader economic and capital market trends, catastrophe bonds and ILS were perhaps the best in the first-quarter of this 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 27 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.