ILS fund Index set for record year, average return hits 12.28% after October

The Eurekahedge ILS Advisers Index is set to achieve a record high annual return in 2023, as a strong showing in October has taken the average return of the insurance-linked securities (ILS) funds it tracks to 12.28% for the first ten months of this year.

Private ILS fund strategies, so those that allocate capital to collateralised reinsurance and retrocession instruments, as well as catastrophe bonds, led the way again in October 2023.

Overall, the average ILS fund was up by 1.38% for the month, beating September’s performance and achieving the second-highest monthly return for this Index of the year so far.

Year-to-date, to the end of October 2023, the average return of ILS funds tracked by ILS Advisers for its Index has now reached 12.28%.

That’s now the second highest annual return on-record, with two months left to run.

Only 2007 saw this Index deliver a higher average ILS fund return, of 13.22% for the full-year.

Given November has run clear for major catastrophe events, it seems likely that the Eurekahedge ILS Advisers Index will surpass that total once that months results are in, setting a new annual record for this industry benchmark of ILS fund performance.

Every ILS fund tracked for this Index was positive in October 2023.

Pure catastrophe bond investment funds as a group were up 1.26% for the month, while the subgroup of funds whose strategies include private ILS such as collateralised reinsurance instruments, gained 1.56%.

There was a relatively wide range of performance, from a flat 0.0% to +3.1% for the month.

A record annual return for this Index is almost assured at this stage, which will send a strong signal for end-investors watching the development of ILS sector returns 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.