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Catastrophe bond - Wikipediahttps://en.m.wikipedia.org/wiki/Catastrophe_bondCatastrophe for Sale | Planet Finance (5/6)https://www.youtube.com/watch?v=jEwYDl5tl-shttps://www.hedgeweek.com/cat-bonds-hold-steady-amid-market-volatility/Over the past 12 months, cat bonds have returned approximately 13%, significantly outperforming both US Treasuries (up 5%) and the S&P 500 (down 5%), according to data from the Swiss Re Global Cat Bond Performance Index. Year-to-date, cat bonds are up around 1%, compared to a 15% drop in the S&P 500, underscoring their resilience as EU and Chinese retaliation against US tariffs intensifies pressure on global equity markets.
With over $50bn in outstanding issuance, the catastrophe bond market is attracting increased interest from hedge funds seeking non-correlated returns. Issuance hit a record high last year, driven by rising demand from insurers and reinsurers looking to transfer climate-related risks—such as hurricanes and wildfires—to capital markets.
“Cat bonds don’t trade with equity or credit markets,” noted Fermat. “They are a pure play on natural catastrophe risk, which is why they continue to act as a shock absorber in diversified portfolios.”