Insurance Linked Securities Interval Funds

Insurance Linked Securities are financial instruments whose performance is determined by insurance loss events primarily driven by weather-related and other natural catastrophes. The premiums on insurance linked securities generally compare with stock returns, while drawdowns have no correlation with stocks or bonds. These funds will experience losses when there are many natural disasters in one year, but typically they are able to increase premiums in the following year, resulting in higher returns. The reinsurance market has become increasingly active in recent years, and the interval fund structure has proven to be an ideal vehicle to invest in this sector. Interval funds that invest in insurance linked securities and other derivatives have proven to be attractive investments that deliver non-correlated returns across different market cycles.