The landscape of insurance-linked securities (ILS) fund products is relatively broad and diverse, even though the majority of ILS funds are crowded into similar sizes and target similar levels of risk, meaning that, for investors, there is value in considering multiple ILS allocations, according to SIGLO Capital Advisors AG.
In fact, analysis undertaken by Swiss based alternative asset advisory specialist SIGLO shows that there is sufficient diversity among investment choices, even within the segments of catastrophe bond and private ILS funds, to warrant the consideration of multiple ILS investment allocations within those product sets as well.
The team at SIGLO has, with the support of many of the sectors ILS managers, analysed and compared factors and metrics related to 52 individual ILS fund strategies accounting for US $27 billion in assets at the time of the study, finding that while there are commonalities, there is also a good deal of diversification available within the ILS fund sector.
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