Cat bonds still attractive vs corporate credit despite spread tightening: K2

While catastrophe bond and insurance-linked security (ILS) spreads have tightened during the second-quarter of 2021, hedge fund specialist manager K2 Advisors believes that they remain attractive relative to corporate credit and are a strategy investors should be focusing on.

Given the still uncertain world, as the recovery from the pandemic continues but challenges related to that and central bank policy remain, the hedge fund focused asset manager, which is a unit of investment firm Franklin Templeton, believes investors should be looking to focus their hedge fund investments on alpha generating non-directional strategies.

One of these is insurance-linked securities (ILS), an area that Franklin Templeton and K2 Advisors provide expertise and now also managed fund strategies, having launched its own UCITS catastrophe bond recently.

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