Brookmont Capital Management Launches First U.S.-Listed Catastrophe Bond ETF (NYSE: ILS)

Business Wire

ILS Pens a $50 Billion Market to Investors Through a Tradable ETF Structure

DALLAS, Texas--(BUSINESS WIRE)--
Brookmont Capital Management today announced the launch of the Brookmont Catastrophic Bond ETF (NYSE: ILS), the first U.S.-listed ETF dedicated exclusively to catastrophe bonds (Cat bonds). The fund simplifies access to a traditionally complex asset class, providing institutional-level exposure to insurance-linked securities (ILS) through an exchange listed, diversified, and transparent investment strategy.

Cat bonds are securities issued by insurers, reinsurers, and governments to offset the financial impact of large-scale catastrophes. They offer investors floating-rate yields, typically in the low teens, funded by insurance premiums. These bonds are fully cash-collateralized through a special purpose vehicle, ensuring greater financial stability for both issuers and investors providing little to no counterparty risk. Unlike other Cat bond investment strategies that include exposure to cyber, terrorism, or financial risks, this ETF exclusively holds Cat bonds tied to natural disasters, providing pure-play exposure to an asset class driven by randomly occurring climate and weather-related events.

“ILS delivers a low-correlation, high-yield alternative to traditional bonds at a time when investors are seeking new sources of income and diversification,” said Ethan Powell, Principal & Chief Investment Officer of Brookmont Capital Management. “Rising weather-related risks highlight the need for Cat bonds more than ever. This ETF invests across various natural catastrophe risks and regions, and rewards investors for supporting disaster recovery efforts while diversifying their portfolios.”

The catastrophe bond market now exceeds $50 billion in outstanding issuance, with projections surpassing $80 billion by the end of the decade.¹ As climate-driven disasters increase in frequency and severity, demand for innovative financial solutions is surging—both from insurers seeking risk-transfer mechanisms and investors looking for alternative income streams.

“The insurance industry is under immense pressure to manage growing losses from natural disasters,” said Rick Pagnani, co-founder of King Ridge Capital Advisors, sub-adviser to ILS. “Cat bonds have become an essential tool for strengthening the insurance ecosystem and, with the robust growth and maturation of this market, we believe ILS will play a role in catalyzing that growth.”

The Brookmont Catastrophic Bond ETF (NYSE: ILS) provides broad exposure to the global Cat bond market, selecting securities based on geographic diversity, peril type, and risk-adjusted return potential. The ETF is actively managed by Brookmont Capital Management, which serves as the fund’s investment adviser, while King Ridge Capital Advisors acts as the sub-adviser, leveraging its expertise in insurance-linked securities. With a total expense ratio expected of 1.58%, ILS offers investors a cost-effective, exchange traded, transparent way to access an asset class traditionally limited to institutional investors.

For more information on the Brookmont Catastrophic Bond ETF (NYSE: ILS), click here.

About Brookmont Capital Management:

Founded in 2007, Brookmont Capital Management is an SEC-registered, employee-owned investment firm managing over $1 billion in assets. The firm specializes in value-oriented strategies that generate compounding cash flows, including its Dividend Growth, Quality Growth, and Core Dividend Strategies.

Brookmont’s investment philosophy is rooted in selective, low-turnover dividend investing, aiming to achieve market-beating returns with lower risk. The firm serves institutional investors, endowments, pension plans, brokers, advisors, and RIAs. Headquartered in Dallas, Texas, Brookmont is led by Ethan Powell, CFA, and Neal Scott.

^1. Artemis Q4 2024 Catastrophic Bond & ILS Market Report