As hedge funds rake in record profits in one of the riskiest corners of the debt market, the products behind those returns are now drawing in more mainstream investors.
Catastrophe bonds, which last year formed the basis for the best-performing hedge fund strategy, have been delivering gains that trounce those of other high-risk fixed-income products. In 2023, the securities soared 20%, compared with 13% for high-yield US corporate bonds. US Treasuries rose roughly 4%.
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