CME Group (CME) Benefitted from Interest Rate Volatility

L1 Capital, an investment management firm, released its “L1 Capital International Fund” fourth quarter 2023 investor letter, a copy of the same can be downloaded here. In the fourth quarter, the fund returned 6.7% (net of fees), outperforming the Benchmark return of 5.4% by 1.3% (all in Australian dollars). The fund returned 36.9% (net of fees) in 2023, outperforming the Benchmark return of 23.0% by 13.9% (all in Australian dollars). Please check the fund’s top five holdings to know its best picks in 2023.

L1 Capital International Fund featured stocks like CME Group Inc. (NASDAQ:CME) in the fourth quarter 2023 investor letter. Headquartered in Chicago, Illinois, CME Group Inc. (NASDAQ:CME) operates contract markets for the trading of futures and options on futures contracts. On March 18, 2024, CME Group Inc. (NASDAQ:CME) stock closed at $218.89 per share. One-month return of CME Group Inc. (NASDAQ:CME) was 3.53%, and its shares gained 19.56% of their value over the last 52 weeks. CME Group Inc. (NASDAQ:CME) has a market capitalization of $78.776 billion.

L1 Capital International Fund stated the following regarding CME Group Inc. (NASDAQ:CME) in its fourth quarter 2023 investor letter:

“Other changes were relatively small, but targeted. For example, we reduced our investment in CME Group Inc. (NASDAQ:CME) and increased our investment in Intercontinental Exchange, two over-lapping but meaningfully differentiated derivatives exchanges. CME has benefitted from U.S. interest rate volatility and overall is a more defensive business compared to Intercontinental Exchange. We expect Intercontinental Exchange’s mortgage technology business to benefit from lower residential mortgage rates over time.”

A businessman in the foreground shaking hands with a colleague in a trading floor.

CME Group Inc. (NASDAQ:CME) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, CME Group Inc. (NASDAQ:CME) was held by 55 hedge fund portfolios, compared to 53 in the previous quarter, according to our database.

We discussed CME Group Inc. (NASDAQ:CME) in another article and shared billionaire Louis Bacon’s long-term stock picks. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.

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