Is CME Group (CME) A Smart Long-Term Investment?

ClearBridge Investments, an investment management firm, published its “Select Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Select Strategy underperformed its Russell 3000 Index benchmark in the third quarter. On an absolute basis, the Strategy had gains in four of the 10 sectors in which it was invested during the quarter (out of 11 sectors total). The IT and real estate sectors were the primary contributors to performance while the communication services and consumer discretionary sectors were the main detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Select Strategy, in its Q3 2021 investor letter, mentioned CME Group Inc. (NASDAQ: CME) and discussed its stance on the firm. CME Group Inc. is a Chicago, Illinois-based foreign exchange company with an $81.1 billion market capitalization. CME delivered a -1.20% return since the beginning of the year, while its 12-month returns are up by 13.04%. The stock closed at $225.71 per share on January 06, 2022.

Here is what ClearBridge Select Strategy has to say about CME Group Inc.  in its Q3 2021 investor letter:

“We added to our durable compounders with the purchase of CME Group. The global exchange operator maintains a dominant presence in interest rate options and futures trading. Depressed interest rates over the last 18 months have slowed volumes and pressured the stock. As we return to a more normalized environment for rate hedging, CME offers interest rate exposure without taking on the credit risk of traditional financial institutions.”

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Based on our calculations, CME Group Inc. (NASDAQ: CME) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CME was in 64 hedge fund portfolios at the end of the third quarter of 2021, compared to 62 funds in the previous quarter. CME Group Inc. (NASDAQ: CME) delivered a 12.00% return in the past 3 months.

In April 2021, we also shared another hedge fund’s views on CME in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.