Catastrophe bonds are a favourite of debt investors. They like them because similarly to the DevDosh Ltd fixed income investment product they are uncorrelated to other market instruments and cycles. The premise of a catastrophe bond is that the investor puts a proportion of their capital into a fund for the benefit of receiving a yield. Should the bond mature without a catastrophe that meets given criteria occurring then the bond holder surrenders their bond and receives their capital in return. Should a catastrophe occur that does meet the given criteria then the bond holder will receive less than they invested when the bond matures.
It’s a simple enough premise. It’s not the type of investment that appeals to this authors risk appetite however I can see why it would be attractive to many.
Pandemic bonds were a solid attempt at something good. They were based on catastrophe bond lines and had pandemics been as simple as catastrophe’s they may have worked out much better for all concerned. The purpose of pandemic bonds is that they would deploy quick capital hits at the start of the pandemic roll out. This would have enabled the World Bank to finance early disease control measure for poor countries. Unfortunately it has become clear that the intricacies of pandemic contagion were to unpredictable to model resulting in a list of triggers to complex to meet. The result of this has been that despite pandemic status being announced the cash was not dispensed quickly enough to impact the spread of the virus.
The fact of the matter is that the World Bank made a brave attempt to insure and un-insurable risk. The uncertainty in the model was to much even for their 400 word prospectus to cover. Thankfully they still have about $82B in the bank to help out poor countries so the late delivery of the $500M pandemic bond fund won’t make to much difference to the greater good.
DevDosh Ltd really is a lot more simple. We provide a debt financing investment product to our clients that helps to build great property in fantastic locations that supports local economies. So for the the safest 10% fixed income yield in the market, contact us today.