Pioneer Cat Bond fund leaps to $218m AUM, 15.9% 1-year return

By the end of February, the dedicated mutual catastrophe bond fund strategy offered by investment manager Amundi US, the Pioneer Cat Bond Fund, had grown its assets under management to reach $218 million, while delivering its investors an almost 15.9% one-year return.

The cat bond fund strategy has added more than 40% to its assets under management over the last just more than one month, having reached just over $150 million in assets at its one year anniversary in late January.

Amundi US launched its first dedicated cat bond mutual fund, the Pioneer CAT Bond Fund, in the first-half of 2023.

The investment manager has seen good interest, with assets under the management in the fund building steadily, offering its clients a complement and alternative to its other insurance-linked securities (ILS) offering, the Pioneer ILS Interval Fund, which allocates to quota share reinsurance arrangements, reinsurance sidecars and private collateralized reinsurance deals.

The Pioneer CAT Bond Fund had reached $84.2 million in assets, as at October 31st 2023, while delivering an 11.20% net asset value (NAV) return from its launch through to that date.

Then, as we said, the fund had grown by around 75% over the next three months to reach the $150 million in assets by late January, now adding a further more than 40% over just more than one month to reach $212 million in cat bond assets under management as of the end of February 2024.

With cat bond prices rising in the secondary market through the start of this year and strong returns being delivered, the performance of Amundi US’ cat bond fund has also accelerated.

The Pioneer CAT Bond Fund’s Class Y shares had delivered a nearly 15.9% one-year return as of the end of February, up from the 14.93% rolling one-year return as of late January.

Year-to-date, for the first two months of 2024, the same Y share class has delivered a 3.3% return to investors.

Chin Liu, Director of Insurance-Linked Securities, Director of Fixed Income Solutions, and Portfolio Manager of the Pioneer CAT Bond Fund, had previously said, “Many of the favorable market trends that we witnessed over the past few years, including more demand from the insurance industry for capital relief and elevated spreads of ILS securities, are still firmly in place.”

The performance of the fund certainly demonstrates that, while the growth in assets under management reflects the strong and growing investor interest in catastrophe bonds.

Amundi US had around $2 billion of ILS assets under management across its dedicated ILS mutual funds and multi-asset class strategies, as of the beginning of this year.