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CFDs: diversification


Active portfolio management can benefit also by going long and/or short on:

 currency 1

Currency CFDs:

Foreign Currency CFDs (or FX CFDs) allow the investor to access the price movements of the world major liquid currencies rates.

The spread between the ‘bid’ price and the ‘offer’ price of FX CFDs is normally extremely tight,  FX CFDs are traded with very low margins and so are normally highly leveraged.

FX CFDs allow the investor to benefit from a revaluation / devaluation trend of one foreign exchange rate against another and this could help a lot when there are good investing opportunities that can be underpinned by an FX devaluation (see recent case for Japanese Nikkei and Yen troubled devaluation versus dollar and British pound).


sector cfd

Equity Sector CFDs: 

these CFDs makes the investor in the condition to take a directional position (long or short) on single equity market sector: telecommunication, high tech, banks and financials, pharmaceuticals, retailers and others.

Sector CFDs work in the same way as Index CFDs and the provider quote a price based on the underlying sector price.

Sector CFDs make the active equity portfolio in the condition to benefit from uptrend / downtrend of the underlying equity sector and this could  increase portfolio diversification, excluding or including specific equity sectors on the back of your forecasted scenario for next future.


commodity-cfd

Commodity CFDs: 

Commodity CFDs make your investments and so your asset allocation correlated to commodity price trend.

Commodity CFDs allow your investment to be correlated to uptrend or downtrend of single commodities or commodities index and this makes your asset allocation more flexible, especially when particular trend appears in a persistent way (as for gold uptrend after Lehman crash).

 

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