Marginal gains theory plays out as cat bond funds proliferate
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Marginal gains theory plays out as cat bond funds proliferate

cat events cat bonds funds.jpg

In a cat bond market of $40bn, the scope for differentiation between strategies is narrow, meaning that managers must leverage the accumulation of small advantages to gain an edge on the competition.

“You can’t differentiate from a benchmark return,” said one consultant to Trading Risk, citing the tendency for performance to cluster in a small-size market with multiple managers of $3bn-$10bn.

However,

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