HANetf and King Ridge Capital have partnered to launch KRC Cat Bond UCITS ETF (ticker: CATB), now listed on LSE.
The firm writes that the ETF invests in a diversified portfolio of cat bonds that transfer natural disaster risk, such as hurricanes and earthquakes, from insurers to capital markets.
Catastrophe bonds offer income that is largely uncorrelated with traditional markets, providing a powerful diversifier for multi-asset and fixed income portfolios.
Actively managed by King Ridge Capital, a specialist in insurance-linked securities (ILS), the ETF invests in a diversified portfolio of cat bonds that transfer natural disaster risk, such as hurricanes and earthquakes, from insurers to capital markets, the firm writes.
“Cat bonds typically offer competitive yields derived from short-term, high-quality collateral plus a premium for assuming catastrophe risk. This structure results in floating-rate income with minimal credit or duration exposure, which can be appealing in an unpredictable rates environment”.
