KRC CAT BOND UCITS ETF USD

Issuer: HANetf

Asset Class: Fixed Income

TER: 95

Trading Currency: GBX

Pays Income: False

Listing Date: 13 Jan 2026

Ticker: ILS

ISIN: IE000UWJUW87

This investment vehicle provides exposure to the catastrophe (cat) bond market, a niche segment of the insurance-linked securities (ILS) space. Cat bonds are financial instruments designed to transfer specific risks, primarily those associated with major natural disasters like hurricanes and earthquakes, from insurance or reinsurance companies to capital market investors. In exchange for taking on this risk, investors receive attractive yields. A key feature of this asset class is its low correlation to traditional financial markets, such as equities and other fixed-income securities. The performance of cat bonds is driven by the occurrence (or non-occurrence) of predefined catastrophic events, not by economic cycles, interest rate fluctuations, or geopolitical tensions.

Investing in cat bonds can serve as a powerful diversification tool within a portfolio. Because their returns are largely independent of broader market movements, they can provide stability and positive returns even when traditional assets are underperforming. The yields offered are typically higher than those of similarly rated corporate or government bonds, compensating investors for the unique event risk they assume. This fund offers a liquid and accessible way to enter this specialized market, which has historically been dominated by institutional investors. The actively managed strategy allows a team of specialists to select bonds based on risk assessment, diversification across different perils and regions, and potential for attractive risk-adjusted returns.

The fund invests in a portfolio of cat bonds covering a range of perils (e.g., US windstorms, Japanese earthquakes) and geographical areas. If a specified catastrophic event does not occur during the life of the bond, investors receive their principal back plus regular coupon payments. If the trigger event does happen, the principal can be used by the sponsoring insurer to pay claims, resulting in a potential loss for the bondholder. The active management approach aims to build a diversified portfolio to mitigate the impact of any single event and to capitalize on opportunities across the cat bond market, aiming to deliver a floating rate return stream with minimal correlation to other asset classes.