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For myself, I'll buy insurance, I'll invest (via mutual funds) in insurance companies, but I'm not too keen on stepping into the insurer's shoes (assuming some of the risk on the insurer's side of policies).
Barron's mentioned in July 21, 2025 issue that CAT bond issuance for YTD (then) was already more than that for full 2024. Be careful with hot areas attracting lot of money.
If there are no recent catastrophic events, then the CAT bond investors win.
In the last few years, there have been some catastrophes related to fire and flooding.
Barron's August 19, 2024 had this: INCOME FUNDS. Catastrophe bonds (CAT BONDS) are speculative insurance-linked bonds whose principals absorb insurers’ catastrophic losses (from hurricanes, earthquakes, etc), if any. If there are no, or not enough, claims for catastrophic events, then the cat bond holders win. Mentioned are OEFs ACBAX, SHRIX, EMPIX; several ETFs are coming; there are also some (nontraded) interval-funds.
Wouldn't a good mutual fund ticker be "SUCER"? For, Seems Unlikely Catastrophic Events Result?
Cat bonds have had double digit returns going on three years now with virtually no volatility along the way. The last major triggering event was Hurricaine Ian in 2022. Most cat bonds are protection against Florida landfall and property damage events. The cat bonds weren’t impacted by Hurricaine Helene which virtually closed parts of NC for weeks and was the most damaging catastrophic event to ever hit that state.
Comments
For myself, I'll buy insurance, I'll invest (via mutual funds) in insurance companies, but I'm not too keen on stepping into the insurer's shoes (assuming some of the risk on the insurer's side of policies).
Stone Ridge Hi Yld Reinsurance Risk PrmI
(SHRIX)
Victory Pioneer CAT Bond Y
(CBYYX)
Ambassador
(EMPIX)
If there are no recent catastrophic events, then the CAT bond investors win.
In the last few years, there have been some catastrophes related to fire and flooding.
Barron's August 19, 2024 had this:
INCOME FUNDS. Catastrophe bonds (CAT BONDS) are speculative insurance-linked bonds whose principals absorb insurers’ catastrophic losses (from hurricanes, earthquakes, etc), if any. If there are no, or not enough, claims for catastrophic events, then the cat bond holders win. Mentioned are OEFs ACBAX, SHRIX, EMPIX; several ETFs are coming; there are also some (nontraded) interval-funds.
I was, of course, making a joke. Still, most riskier bond funds have been doing quite well for 3 years.