Morningstar surveys the fast-growing but concentrated catastrophe bond fund market, where 43 funds hold $37.7 billion in assets. Two of the three largest funds have already closed to new investors, even as fees remain far above traditional bond funds and the sole cat bond ETF undercuts no one.
Catastrophe Bond Fund Landscape
Morningstar
Mara Dobrescu, Paul Olmsted
Research
20 Pages
Key Takeaways
Market highly concentrated: Just five managers dominate the space, and the top 10 funds account for 75% of all $37.7 billion in assets.
Fees run high: Cat bond funds average a 1.14% annual cost, versus under 0.70% for typical global diversified-bond funds.
Index outperformance rare: Over five years, the median fund lagged the SwissRe Cat Bond Index by almost 400 basis points annually.
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