
Stable returns – usually even in difficult times (Photo: freepik, The Yuri Arcurs Collection)
When the storm rages on the markets, investors look for stable anchor points. Insurance stocks are often not the focus, even though they offer considerable potential. With their solid structure, long-term stable returns and regular dividends, they are ideal for conservative investors. A prime example of the successful combination of these qualities is the Polar Capital Global Insurance Fund.
Boring? Yes. Successful? Also yes.
The insurance business is considered sober and unexciting. But it is precisely this supposed boredom that makes insurance stocks so robust. They are based on a conservative business model with stable premium income and reliable cash flows. Even in difficult economic times, demand for insurance remains high – a protective shield for investors.
Polar Capital Global Insurance (ISIN: IE00B4X2MP98) invests in a wide range of insurance companies worldwide, including traditional life insurers, reinsurers and specialty insurers. Since its inception in October 1998, the fund has achieved a spectacular total return of over 1,000 percent, representing an annual performance of 9.7 percent.
The fund: A look under the hood
The portfolio is managed by experienced fund managers Nick Martin and Dominic Evans. Martin, who has been working for since 2010 Polar Capital has more than 25 years of industry experience. Supported by Evans, he meticulously analyzes the insurers’ underwriting practices and claims history. Only companies that are financially stable and can continually increase their profits make it into the portfolio.
With around 30 positions, the fund is specifically diversified. The largest single position, at 9.1 percent, is Arch Capital, a leading provider of property and casualty insurance based in Bermuda. Other top holdings include RenaissanceRe, Marsh McLennan and Fairfax Financial Holdings.
Regionally, US companies dominate with a portfolio share of 74 percent. This is supplemented by British (11.6 percent) and Canadian (9.1 percent) values. Insurers from Europe and Asia play a subordinate role.
Stable returns – usually even in difficult times
Since its inception, the fund has only suffered a double-digit loss in one year – 2008 during the financial crisis. Otherwise, it has proven to be a reliable source of returns. In the past 10 years, the fund generated almost 215 percent and over 15 years 639 percent, while the comparison sector lagged significantly behind.
Conclusion: Defensive return generator with class
The Polar Capital Global Insurance Fund is an excellent building block for any portfolio that relies on stability and continuous growth in value. Insurance stocks may not be the brightest stars in the stock market, but their structure is robust and attractive Dividends make them an underestimated source of returns. With strong overall performance and experienced management, this fund is a worthwhile choice for long-term investors.
Disclaimer:
Not investment advice. No call to buy or sell securities.