Cat bond rally losing momentum

The latest figures from ILS Advisers and Eurekahedge show a slowing in the strong rally achieved in the cat bond market since June this year, with the market up 0.17 percent in October.

ILS Advisers found that the average ILS fund rose by 0.53 percent in October—below the historic average—and 6.56 percent during the year to date, as measured by its Eurekahedge ILS Advisers Index. The index examines the performance of 33 dedicated funds, with all but one of the fund reporting positive performance numbers during the period.

ILS Advisers said that “returns for October were driven mainly by yield rather than price appreciation. This was the result of the cat bond market having priced in the expectation of a mild hurricane season earlier than usual.”