Catastrophe Bonds Among Few Asset Classes Withstanding Selloff

A bond market designed around natural catastrophes is proving remarkably resilient to a man-made market meltdown.

While most markets have seen deep selloffs since Donald Trump’s “Liberation Day” tariff announcement, investors in catastrophe bonds have sailed through with hardly a ripple.

Fermat Capital Management, a Connecticut-based hedge fund specialized in insurance-linked securities, says the market for catastrophe bonds “has been trading in an orderly fashion” and investors who bought them “are seeing the benefit.”

The outperformance by cat bonds comes even as markets traditionally treated as havens get dragged down by the panic triggered by Trump’s tariffs. ...