CMC Markets has added 17 new share baskets, covering a wide range of topical industries, including gaming, banking, and renewable energy. The trading platform has thus expanded the offering to trending sectors as recent market volatility made investing more attractive in the search of bargains. Further baskets can be added quickly in response to customer demand.
The leading retail FX and CFD broker chose to make this sector-based approach as it facilitates easier trading of trending markets, from streaming media to banking. The offering of share baskets also provides lower trading and holding costs versus individual equity CFDs. Baskets of securities, each containing up to 50 stocks, give broad exposure, mitigating risk of volatility in one stock.
The 17 new share baskets each contain up to 50 stocks whose operations relate to a specific theme, with each constituent being given a tiered weighting. In order to efficiently maintain the configurations and ensure all corporate actions are handled appropriately, we are working with business information provider IHS Markit, a leading source of independent valuation services for exchange-traded products and custom baskets.
Simon Campbell, Group Head of Trading at CMC Markets, commented: “As a business we are committed to driving client success and continue to build products with this mission in mind. We see our clients’ interests pique when certain industries come into focus and we wanted to be able to offer an alternative way for our clients to trade on the opportunity. With each of these high-profile industries being well covered in the mainstream media, there’s no shortage of information to help form trading decisions. So, whether a sector’s valuation is rising or falling, these baskets allow our clients to easily ‘trade the trend’ by taking a long or a short position accordingly.”
The new baskets added are Cannabis, 5G, Big Tech, Cyber Security, Mobile Payments, Driverless Cars, Gaming, US Banks, Renewable Energy, China Tech, Streaming Media, Social Media, Software as a Service, Automation & Robotics, UK Banks, European Banks, and European Automobiles. Constituents in each basket are given a tiered weighting to avoid large price movements for conglomerates operating across multiple sectors from having a disproportionate influence on a
basket’s valuation.
Christopher Hare, Global Head of Product Development for DeltaOne at IHS Markit, added: “We are excited to deliver our expertise in portfolio and index valuation by collaborating with well-established providers like CMC Markets. Working together, we will advance the availability of innovative investments which bring greater flexibility to global financial markets.”
