Opportunities in Catastrophe Bonds

Monday 09 October 2023

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Opportunities in Catastrophe Bonds

October 2023 | Catastrophe bonds are outcome-oriented investments with low correlation to the broader capital markets. Because they do not move in line with traditional financial stocks, these instruments provide potential opportunities for investors to expand the scope of their portfolios. In addition, they have offered more attractive risk/return characteristics over the past 10 years than have many traditional asset classes.

01 |  The performance of insurance-linked securities, including catastrophe bonds, is linked to low-probability but high-severity events. As a result, their performance generally has a low correlation to traditional financial markets.

02 | The reinsurance industry has been in existence for over 150 years, and its benchmark, the Swiss Re Global Cat Bond Index, has delivered positive returns in 20 of the past 21 years.

03 | A supply/demand imbalance for reinsurance, compounded by recent events over the past several years, may have significantly increased the investment opportunity, and we expect these trends to continue into the foreseeable future.

Opportunities in Catastrophe Bonds

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of September 30, 2023. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the [author] and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.

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