What kind of returns can I expect?

Är cat bonds really independent of equity?

How is my portfolio affected?

When should I enter the market?

What if interest rates increase?

Cat bonds from an investor perspective

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bonds for investors



Team specialized in insurance risks

Responsible investment

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Update 2 on hurricane Michael

Hurricane Michael has intensified more than previously forecast and has during the evening made landfall at Mexico Beach in Northwestern Florida as a Category four hurricane. The increased intensity means that insured losses will increase compared to previous forecasts and could potentially entail insurance payouts from cat bonds and Entropics Cat Bond Fund. Small deviations of the continued path of the hurricane could, however, have large impact on the losses.

How do cat bonds work?

Entropics Asset Management – Cat bond investments

Cat Bonds are securities that transfer insurance risks from an insurer to the financial markets. This provides for insurance coverage for people and enterprises facing catastrophe risk. To investors, Cat Bonds offer an asset class with low correlation and historically good risk adjusted returns.

Fund Rate Since start One week One year Report
SEF Entropics Cat Bond (Class A) 98.36 -1.64% -0.51% +0.23% Latest report
SEF Entropics Cat Bond Fund Class I (institutional investors) 96.13 -3.87% -0.50% +0.58% Latest report

Read more about our funds.

Risk Information:
Fund investments entail risk. The value of investments in funds can increase as well as decrease and investors can loose all or some of the investment. Historical return is not a guarantee of future returns.

The heatwaves and the wildfires in the Northern Hemisphere in the summer of 2018 have put climate change at top of the agenda of media and politics. As we already see the adverse effects of rising temperatures, it is important to assess the impact on insurance-linked securities (ILS). In summary, the typical cat bond term of 3 – 5 years provides for continuous adjustments of pricing to encompass both climate effects and a globally increasing need for insurance. As ILS are an important mean to mitigate climate risks, we are likely to see more ILS solutions in the future. Read more

Martin Hedberg
Martin Hedberg
Chief Meteorologist

In April, new outbreaks of the much-feared hemorrhagic fever Ebola shook the world again. The last major outbreak in West Africa 2014-2016 caused more than 11,000 deaths, and dealt a devastating blow to the long-term economies of several countries in the region. The effects were largely due to slow and insufficient response by the world community. However, this time, it appears that the lessons learned have provided for a much faster response, based on insurance principles and backed by cat bonds, rather than reliance on foreign aid. Read more

Henrik Sjöholm
Henrik Sjöholm
Director of Communications and Responsible Investment

Both cat bonds and corporate bonds are fixed income instruments so it is relevant to compare the risk premium of cat bonds with similarly rated traditional corporate bonds. Currently, cat bonds pay a higher risk premium compared to similarly rated corporate bonds. Read more

Oskar Schyberg
Oskar Schyberg
Orkanen Irma vid tiden för landfall 10 september

The flooding from Hurricane Harvey was barely over when the world was alerted about Hurricane Irma. How could it be that the USA, after twelve years’ absence from major hurricanes, felt the impact of two record-breaking hurricanes over the course of one week? Read more

Martin Hedberg
Martin Hedberg
Chief Meteorologist

While investors are attracted to the uncorrelated returns of cat bonds, the purpose of issuers is to obtain insurance coverage against low frequency and high severity catastrophes. Consequently, we will eventually face an event large enough to cause extensive losses in the re/insurance industry and the cat bond market. However, an event, such as a hurricane category 4 or 5 making landfall in Southern Florida, also tends to increase future returns for investors, as the insurance industry need to attract new risk capital. Read more

Robert Lindblom
Robert Lindblom
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