Brookmont Cat Bond ETF Moves Listing to

The Brookmont Catastrophic Bond ETF (ticker ILS) will move its primary listing venue to the Texas Stock Exchange on September 18. Brookmont Capital Management, the Texas-headquartered asset manager behind the fund, hopes this shift will help it onboard a lead market maker within weeks.

The ETF was first launched and listed on the New York Stock Exchange ARCA platform at the beginning of April. It was the first catastrophe bond fund strategy to be listed and traded on a US exchange. The ticker symbol ILS will remain unchanged, and the firm states there is no change for investors in the strategy.

A key reason for the move is to expand market maker participation. The fund failed to secure a lead market maker at its launch, partly because the insurance-linked securities (ILS) asset class is difficult to hedge. Ethan Powell, Principal and CIO of Brookmont Capital Management, told Artemis that the Texas Stock Exchange has a program allowing lead market makers to be paid in a more transparent and direct manner. He is hopeful this will simplify the process.

"The good news is our secondary bid/ask spreads have been exceptionally tight but we need a lead market maker as we grow and anticipate larger institutional allocations," Powell stated.

Fund Performance and Growth

The Brookmont Catastrophic Bond ETF has grown steadily, reaching over $95.6 million in assets this month. This represents an increase of around 13% over just the last ten trading sessions.

Rick Pagnani, CEO of King Ridge Capital, the sub-adviser and portfolio manager to the ETF, said growth was driven predominantly by net investor inflows. He noted trading remained orderly and the market price stayed closely aligned with NAV, demonstrating effective liquidity. "Bid-ask spreads remained tight at around 10 basis points on a median basis, reflecting an efficient secondary market and effective support from the ETF’s authorized participants," Pagnani explained. The fund is approaching the $100 million milestone.

Powell further explained that the transfer to Texas is "an opportunity to continue to grow and scale ILS, facilitated by a lead market maker."

The Texas Stock Exchange Listing

The Texas Stock Exchange only began trading in July. It launched in recent years with strong institutional backing as a new listing and trading venue. The Brookmont Catastrophic Bond ETF will become the first fixed income exchange-traded fund with a primary listing on the Texas Stock Exchange. It will also join the first cohort of listings the TSE has announced. The other first listings on the TSE are also local investment firms.

In addition, Powell told Artemis that Brookmont is working on a new innovation in partnership with the TXSE. This initiative aims to list a consumer credit and pre-IPO equity interval funds on an exchange. For more specialist data on financial instruments, you can review our stats and fixtures pages.

The source for this report is Artemis.bm.