Insurance-linked securities investment strategies across catastrophe bonds and private ILS clearly demonstrated the valuable diversification the asset class can deliver in March 2026, with the ILS Advisers Fund Index rising 0.67% for the month.For the first-quarter of 2026, the average return across ILS funds tracked by the has reached 2.05%.Which appears to be the sixth best first-quarter performance for this Index of ILS fund returns, in the now two decades it has tracked the asset class.As you’d expect, given the lack of major catastrophic losses in Q1, the group of private ILS funds outpaced pure cat bond fund returns in the period.

To recap, the average ILS fund return reached 0.82% for January, which was above average, then February saw ILS funds averaging 0.55% once all reports were in.March 2026, at 0.67%, was the seventh highest performance for that month on record, as ILS funds again benefited from a relatively benign catastrophe loss environment.March’s Index return is based on reporting from 95% of fund managers included in the ILS Advisers Index so far, meaning it could move slightly higher once all performance figures are received.

ILS Advisers highlight why investors find the asset class appealing, as it once again demonstrated the relatively uncorrelated nature of the return stream it can provide.ILS Advisers commented, “Amid a broader backdrop of heightened financial market volatility, driven in large part by ongoing geopolitical tensions related to the war in Iran, Insurance-Linked Securities once again demonstrated their value as a diversifying asset class.“Their performance remained largely insulated from macroeconomic shocks, reinforcing their low correlation with traditional financial markets.” The ILS asset class delivered stronger returns in Q1 2026 than many equity markets, investment grade and high-yield bond benchmarks and a number of broader hedge fund indices, as the volatile economic environment impacted them and made the value of diversifiers clear once again.

While there were notable severe weather outbreaks in the United States in March, including a late-season blizzard in the Upper Midwest, a heat wave in the south and convective storms and tornadoes across central states, no single event became a major loss driver, ILS Advisers explained.In the catastrophe bond market, ILS Advisers noted strong issuance so far this year and said, “The issuance pipeline is expected to remain active in the coming months.A mix of repeat issuers and first-time sponsors is anticipated, underscoring both the continued reliance on the cat bond market by established participants and its growing appeal to new entrants seeking diversified sources of protection.” Across the ILS funds tracked by the Index, pure catastrophe bond funds averaged a 0.46% return for March 2026, while private ILS funds that also allocate to reinsurance and retrocession arrangements were up by 0.95% on average.

Across the 37 constituent ILS fund strategies included in the Index all were positive, while the range of performance for March spanned from flat at 0.00% to as high as a 3.87% return for the month.Track the .You can track the .

It comprises an equally weighted index of 37 constituent insurance-linked investment funds which tracks their performance and is the first benchmark that allows a comparison between different insurance-linked securities fund managers in the ILS, reinsurance-linked and catastrophe bond investment space..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.