Alger Growth & Income Fund on CME Group Inc.
Thesis
Alger views CME Group as important global financial infrastructure because of its deep liquidity, broad derivatives product set and central role in futures markets. Shares weakened as lower volatility raised concerns that elevated energy and interest-rate trading volumes could normalize, while a CEO transition and potential competition from perpetual futures also hurt sentiment. Despite those pressures, the fund continues to view CME's franchise and competitive position favorably.
“we continue to view CME’s franchise and competitive position favorably.”
Key risks
- Normalization of trading volumes as volatility moderates
- Leadership uncertainty after the announced CEO transition
- Competition from newly approved perpetual futures products