Jakarta. US stocks contract for differences, or shortened CFD, are now available on Indonesia-based investment app Pluang, the company announced on Wednesday.
Millions of Pluang users now have the opportunity to gain exposure to 40 major US stocks, including tech behemoths like Google and Apple, for portfolio diversification. Pluang Co-Founder Claudia Kolonas suggested that investors invest in US stocks CFDs, given that it is a strategic class asset.
"The US stock market has always been the first choice for top global companies, such as Starbucks, Nike, McDonald's, and of course, FAANG [Facebook, Amazon, Apple, Netflix, Google] to go public. Now, our users can invest in these companies in just three clicks on the Pluang app," Claudia said in a press statement on Wednesday.
Pluang is also launching the US stocks CFD to cater to the growing number of millennial investors in Indonesia. With the CFDs, users can start as little as $5 without any transaction or withdrawal fees, so they do not need to worry about emptying their wallets.
The CFD is still the only legal way for domestic retail investors to invest in US stocks. Pluang said its users would feel as if they are directly investing in the US stock market, given that the CFDs have a 1:1 hedging ratio. Users also still have the opportunity to receive dividends from their shares and get the same benefits as making a direct investment. They can also invest in a fraction of US stocks, starting from as little as 0.1 units of share.
Powering the Pluang's US stocks, CFD is Indonesian futures broker PG Berjangka. PG Berjangka has already secured the PALN license from the Commodity Futures Trading Regulatory Agency (Bappebti). All CFD US stock transactions in Pluang are also facilitated and guaranteed by state-owned clearing house Kliring Berjangka Indonesia (KBI). Before the US Stock CFDs launch, Pluang had introduced the Micro e-mini S&P 500 Index Futures and Micro e-mini NASDAQ100 Index Futures to its users.
Great for Portfolio Diversification
Earlier, Pluang said that the US stocks could be an excellent option for portfolio diversification, given its robust performance amid the Covid-19 pandemic. For instance, the value of Apple's stock has jumped over 40 percent in just a year. As companies worldwide rushed to implement work from home, Apple's products have been in great demand.
Besides that, the three major US stock indexes, namely Dow Jones Industrial Average, S&P 500, the NASDAQ Composite, have the world's largest market cap. The S&P 500, for instance, has a $39 trillion-worth market cap as of October 2021.