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Wealth Insights | Asset Allocation | Investing101 | Equities | Fixed Income

Investing 101: How To Build a Diversified Core Portfolio

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 Key Takeaways:

  1. Time in the market matters more than timing the market:
    Staying invested has historically enhanced portfolio returns by avoiding the risk of market timing and outperformed holding large cash allocations.
    Longer Holding periods have historically enhanced portfolios’ long-term returns.

  2. Asset Allocation is key
    Strategic asset allocation provides a guide to both meeting long-term investment objectives and benefitting from shorter term tactical adjustments.
    How investments are allocated within a portfolio is a crucial determinant of long-term returns.

  3. Diversification may offer potential opportunities
    Allocating selectively across different geographies can improve portfolio diversification as sector allocations vary across borders and economic cycles in different geographic regions are not always aligned.
    Adopting a multi-asset strategy can improve portfolio resilience and can help limit drawdowns.

​

Time in the market vs Timing the market

The age-old question. Does market timing work? How hard is it? What happens if I get it wrong? In this section, we present a few points and evidence that puts to rest the question of market timing.

Timing the market is hard, and getting it wrong is costly

The best and worst days often occur together making spotting true turning points challenging. Over 90% of S&P 500 daily rallies of 4% or more since 1970 have occurred when markets were more than 10% below their most recent market high. There can be multiple rallies of this strength during down markets, which can make catching genuine turning points challenging, and missing out on being invested during these days costly.

Sources: Bloomberg, S&P Global, Global Investment Lab. Data from 2nd January 1970 to 29th September 2023. A “log scale” is a way of displaying numerical data over a wide range of values in a compact way. Equivalent vertical distances on a log scale represent the same percentage change in the index between two periods. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Please see the Appendix for important information (including important disclosures, a glossary of terms, indices and risks).

Trying to time the market doesn’t work

Time in the market matters more than trying to time the market. Fear of loss often leads to selling near market lows and missing out on recoveries. Switching to cash after periods of market drawdowns historically have underperformed staying invested in the global equities.

Sources: Bloomberg, Global Investment Lab. Data from 2nd January 1993 to 31st December 2023. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Please see the Appendix for important information (including important disclosures, a glossary of terms, indices and risks).

Patience pays off: longer holding periods can enhance returns

Over a longer holding period, the probability of positive annualized returns rises. Using data from 1950 onwards, we looked at the average net annualized returns from a diversified asset allocation held for amounts of time between 1 and 20 years. Longer holding periods resulted in a smaller spread between returns, and even the lowest quartile of annualized returns became positive over a longer holding period.

Source: CGWI’s Global Asset Allocation and Quantitative Research team, Global Investment Lab as of October 31 2023. *The illustrations use data from January, 1950 to October 2023. The net performance results reflect a deduction of 2.5% which is the weighted average annual maximum advisory fee that could be paid in connection with advisory services that covers fees and transaction costs; actual fees paid may differ. Asset allocation and diversification do not ensure profit or protection against. Past performance is no guarantee of future results. Actual results will vary.


Asset Allocation is a key driver of long-term returns

The allocation of funds within a portfolio is key for meeting investing goals. Asset allocation describes the choice of how to divide between different asset classes and sub-asset classes. The relative proportions of different assets held will be a function of an individual investor’s goals, risk tolerance, rewards sought, and time horizon.

It has long been held as the key determinant of variability in portfolio returns* and as such represents a critical step in portfolio construction. The remainder of returns are predominantly driven by instrument selection (which stock, bond, fund to invest into within each sub-asset class) and market timing.

Once the appropriate core strategic asset allocation is set, the next most important thing is to stay invested.

*Source: Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower, Determinants of Portfolio Performance, Financial Analysts Journal, July/August 1986. Also see Roger G. Ibbotson, Importance of Asset Allocation, Financial Analyst Journal, March/April 2010. Asset allocation and diversification do not assure a profit or protect against loss.


Diversifying across asset classes can improve returns

A diversified portfolio can help achieve better risk adjusted returns over time.

​Source: Citi Global Investment Lab as of November 2023. For discussion purposes only. The returns shown were calculated at an asset class level in USD terms using indices and reflecting a deduction of 2.5% p.a. on the Diversified Portfolio and traditional level 3 Diversified Portfolio which is the maximum fee that can be charged in connection with advisory services that covers advisory fees and transaction costs. Data assumes the reinvestment of dividends. The Diversified Portfolio is shown as: 10% Developed Equities, 2% Emerging Equities, 38% Investment Grade Bonds, 2% High Yield Bonds, 4% Emerging Fixed Income, 2% Cash, 12% Hedge Funds, 20% Private Equity and 10% Real Estate. Benchmark indices were used to proxy asset classes within this basket. Please see Appendix for index definition. Indices are unmanaged. An investor cannot invest directly in an index. Past performance is no guarantee of future results. Real results may vary. Diversification does not ensure profit or protection against loss. *Until October 2023


A diversified portfolio may offer improved risk-adjusted returns

A diversified portfolio allocated across multiple asset classes can benefit from different return drivers.

Here are some considerations for diversification:

  1. Define investment objectives and risk tolerance
    A disciplined approach to diversified portfolio construction allows for improved returns and reduced risks in line with the investor’s individual profile.
     
  2. Diversify across and within asset classes to mitigate risk
    Historically no single asset class – or sub-asset class – has consistently outperformed over time.
     
  3. Diversify across geographies
    Geographic diversification can potentially allow an investor to harness the potential for growth in different regions while mitigating downside risk.

​Source: Citi Global Investment Lab as of November 2023. Analysis period: January 1993 – Sep 2023. For discussion purposes only. The returns shown were calculated at an asset class level in USD terms using indices and reflecting a deduction of 2.5% p.a. on the Diversified Portfolio and the 60/40 Portfolio which is the maximum fee that can be charged in connection with advisory services that covers advisory fees and transaction costs. Past correlations are no guarantee of future results. Real result may vary. Diversification does not ensure profit or protection against loss. Data assumes the reinvestment of dividends. *Diversified Portfolio is a USD CCGWI Reference Level III Diversified Portfolio with an allocation to alternatives net of an annual 2.5% performance fee, and rebalanced monthly. The Diversified Portfolio is shown as: 9% Developed Equities, 2% Emerging Equities, 38% Investment Grade Bonds, 4% High Yield Bonds, 4% Emerging Fixed Income, 2% Cash, 12% Hedge Funds, 20% Private Equity and 10% Real Estate. The 60/40 Portfolio is shown as: 51% Developed Equities, 9% Emerging Equities, 32% Investment Grade Bonds, 4% High Yield Bonds, 4% Emerging Fixed Income and 2% Cash. Benchmark indices were used to proxy asset classes within this basket. Please see Appendix for index definition. Indices are unmanaged. An investor cannot invest directly in an index. Past performance is no guarantee of future results. Real results may vary.


Harnessing equity diversification across countries and sectors

Diversification with a diversified portfolio could potentially allow an investor to harness the potential for growth in different regions while mitigating downside risk. Similarly, different sectors perform differently in different economic environments. Accordingly, diversifying across sectors could help protect against the risk of any one sector lagging.

Sources: Global Investment Lab, Bloomberg. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Please see the Appendix for important information (including important disclosures, a glossary of terms, indices and risks). Diversification does not ensure profit or protection against loss.


Duration and credit quality diversify within fixed income

Longer duration and higher credit quality bonds tend to be less sensitive to market movements and have lower correlation with equities. At different points during the economic cycle duration may provide protection against potential equity market volatility. Credit quality is another characteristic to consider when building a diversified portfolio; all else equal higher credit quality assets tend to be less sensitive to market movements and have lower correlation with equities.

​

​Sources: Global Investment Lab, Bloomberg. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Please see the Appendix for important information (including important disclosures, a glossary of terms, indices and risks). *Long term bonds are proxied by the Bloomberg US Treasury 5 – 10 Year Index (LT51TRUU Index) and US Equities are proxied by the S&P 500 Index (SPX Index).
 

Alternatives may offer exposure to different return drivers for qualified investors

Adding alternative investments to a portfolio may help improve risk adjusted returns. Alternative assets may provide investors with potential above average returns as well as opportunities to participate in targeted, thematic strategies that are generally unavailable via more liquid instruments. However, they also have exposure to unique risks, which include a lack of liquidity, potential for losses, possible higher associated fees and charges as well as a limited secondary market.

Source: Global Investment Lab using monthly data from January 1990 to September 2023.

  • Diversified Portfolio w/ Alternatives is a USD CCGWI Reference Level III Diversified Portfolio with an allocation to alternatives net of an annual 2.5% performance fee, and rebalanced monthly. The Diversified Portfolio is shown as: 10% Developed Equities, 2% Emerging Equities, 38% Investment Grade Bonds, 2% High Yield Bonds, 4% Emerging Fixed Income, 2% Cash, 12% Hedge Funds, 20% Private Equity and 10% Real Estate.
  • The 60/40 Portfolio is shown as: 52% Developed Equities, 9% Emerging Equities, 32% Investment Grade Bonds, 2% High Yield Bonds, 3% Emerging Fixed Income and 2% Cash.
  • Global Fixed Income is proxied by the Investment Grade Bonds AVS time series.
  • Global Equities is proxied by the Developed Equities AVS time series.

Benchmark indices were used to proxy asset classes within this basket. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Please see the Appendix for important information (including important disclosures, a glossary of terms, indices and risks). Diversification does not ensure profit or protection against loss.
 

Gold has historically been a diversifier in downside scenarios

Gold’s price correlation with broad market indices suggests it has generally been a potential diversifier, particularly during periods of market stress. Historically, gold has demonstrated a weak correlation with both traditional and alternative asset classes. During periods of economic uncertainty and market downturns, gold prices on average outperformed US equities, providing diversification.

​​Correlation Source: Citi Private Bank’s Global Investment Lab as of 30 September 2023, Bloomberg Analytics as of 31 October 2023. Correlation Analysis period: January 1970 – September 2023, monthly observations.*Correlation is the extent to which the values of different types of investments move in tandem with one another over time. It is measured on a scale of -1 to +1, a correlation value of +.5 or more tend to rise and fall in value at the same time, while investments with a negative value of -.5 to -1 are more likely to gain or lose value in opposing cycles. Please see the Appendix for asset class definitions. **Please see the Glossary in the Appendix for the full list of definitions for the Market Situations shown (page 34) and for indices used. Asset allocation and diversification do not assure a profit or protect against loss in a declining market. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. An investment’s exposure to the price of commodities may, in some circumstances, subject the investment to greater volatility than investments in traditional securities.
 

Putting it all together: a diversified core portfolio

A diversified portfolio can potentially offer improved risk-adjusted returns

Historically, a global diversified portfolio including an allocation to alternatives outperformed a “60/40” Portfolio of 60% global equities and 40% global bonds, which in turn outperformed cash holdings in both absolute and risk-adjusted terms.

 

Diversification does not guarantee a profit or ensure against a loss of principal.

Source: CGWI’s Global Asset Allocation and Quantitative Research team, Global Investment Lab using monthly Bloomberg data from February 1990 to June 2023. Cash is AVS Cash *Diversified Portfolio is a USD CCGWI Reference Level III Portfolio with an allocation to alternatives net of an annual 2.5% performance fee, and rebalanced monthly. The specific allocation of the CGWI Reference Level III Diversified Portfolio is 35% Developed Equities, 6% Emerging Equities, 31% Investment Grade Bonds, 2% High Yield Bonds, 3% Emerging Fixed Income, 2% Cash, 10% Hedge Funds, 7% Private Equity and 3% Real Estate. ** The 60/40 Portfolio is shown as: 51% Developed Equities, 9% Emerging Equities, 32% Investment Grade Bonds, 2% High Yield Bonds, 4% Emerging Fixed Income and 2% Cash. Global Fixed Income is proxied by the Investment Grade Bonds AVS time series and Global Equities is proxied by the Developed Equities AVS time series Benchmark indices were used to proxy asset classes within this basket. Risk Level III: Seeks modest capital appreciation and, secondly, capital preservation. The fully diversified Portfolio was developed using CGWI proprietary asset allocation methodology. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future results. Actual results will vary. Please see the Appendix for important information (including important disclosures, a glossary of terms, indices and risks). An investment’s exposure alternatives may potentially subject the investment to greater volatility than investments in traditional securities.

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Citibank, N.A., Hong Kong Branch or Citibank, N.A., Singapore Branch may sub-delegate all or part of its mandate to another Citigroup affiliate or other branch of Citibank, N.A. Any references to named portfolio managers are for your information only, and this communication shall not be construed to be an offer to enter into any portfolio management mandate with any other Citigroup affiliate or other branch of Citibank, N.A. and, at no time will any other Citigroup affiliate or other branch of Citibank, N.A. or any other Citigroup affiliate enter into a mandate relating to the above portfolio with you. To the extent this communication is provided to clients who are booked and/or managed in Hong Kong: No other statement(s) in this communication shall operate to remove, exclude or restrict any of your rights or obligations of Citibank under applicable laws and regulations. Citibank, N.A., Hong Kong Branch does not intend to rely on any provisions herein which are inconsistent with its obligations under the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, or which mis-describes the actual services to be provided to you.

Citibank, N.A. is incorporated in the United States of America and its principal regulators are the US Office of the Comptroller of Currency and Federal Reserve under US laws, which differ from Australian laws. Citibank, N.A. does not hold an Australian Financial Services License under the Corporations Act 2001 as it enjoys the benefit of an exemption under ASIC Class Order CO 03/1101 (remade as ASIC Corporations (Repeal and Transitional) Instrument 2016/396 and extended by ASIC Corporations (Amendment) Instrument 2022/623).

In the United Kingdom, Citibank N.A., London Branch (registered branch number BR001018), Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB, is authorized and regulated by the Office of the Comptroller of the Currency (USA) and authorized by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. The contact number for Citibank N.A., London Branch is +44 (0)20 7508 8000.

Citibank Europe plc (UK Branch), is a branch of Citibank Europe plc, which is authorised and regulated by the Central Bank of Ireland and the European Central Bank. Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Citibank Europe plc, UK Branch is registered as a branch in the register of companies for England and Wales with registered branch number BR017844. Its registered address is Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB. VAT No.: GB 429 6256 29. Citibank Europe plc is registered in Ireland with number 132781, with its registered office at 1 North Wall Quay, Dublin 1. Citibank Europe plc is regulated by the Central Bank of Ireland. Ultimately owned by Citigroup Inc., New York, USA.

Citibank Europe plc, Luxembourg Branch, registered with the Luxembourg Trade and Companies Register under number B 200204, is a branch of Citibank Europe plc. It is subject to the joint supervision of the European Central bank and the Central Bank of Ireland. It is furthermore subject to limited regulation by the Commission de Surveillance du Secteur Financier (the CSSF) in its role as host Member State authority and registered with the CSSF under number B00000395.
Its business office is at 31, Z.A. Bourmicht, 8070 Bertrange, Grand Duchy of Luxembourg. Citibank Europe plc is registered in Ireland with company registration number 132781. It is regulated by the Central Bank of Ireland under the reference number C26553 and supervised by the European Central Bank. Its registered office is at 1 North Wall Quay, Dublin 1, Ireland.

This document is communicated by Citibank (Switzerland) AG, which has its registered address at Hardstrasse 201, 8005 Zurich, Citibank N.A., Zurich Branch, which has its registered address at Hardstrasse 201, 8005 Zurich, or Citibank N.A., Geneva Branch, which has its registered address at 2, Quai de la Poste, 1204 Geneva. Citibank (Switzerland) AG and Citibank, N.A., Zurich and Geneva Branches are authorised and supervised by the Swiss Financial Supervisory Authority (FINMA).

In Jersey, this document is communicated by Citibank N.A., Jersey Branch which has its registered address at PO Box 104, 38 Esplanade, St Helier, Jersey JE4 8QB. Citibank N.A., Jersey Branch is regulated by the Jersey Financial Services Commission. Citibank N.A. Jersey Branch is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped
at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website www.gov.je/dcs, or on request.

Citi may offer, issue, distribute or provide other services in relation to certain unsecured financial instruments issued or entered into by BRRD Entities (i.e., EU entities within the scope of Directive 2014/59/EU (the BRRD), including EU credit institutions, certain EU investment firms and / or their EU subsidiaries or parents) (BRRD Financial Instruments).

In various jurisdictions (including, without limitation, the European Union and the United States) national authorities have certain powers to manage and resolve banks, broker dealers and other financial institutions (including, but not limited to, Citi) when they are failing or likely to fail. There is a risk that the use, or anticipated use, of such powers, or the manner in which they are exercised, may materially adversely affect (i) your rights under certain types of unsecured financial instruments (including, without limitation, BRRD Financial Instruments), (ii) the value, volatility or liquidity of certain unsecured financial instruments (including, without limitation, BRRD Financial Instruments) that you hold and / or (iii) the ability of an institution (including, without limitation, a BRRD Entity) to satisfy any liabilities or obligations it has to you. In the event of resolution, the value of BRRD Financial Instruments may be reduced to zero and or liabilities may be converted into ordinary shares or other instruments of ownership for the purposes of stabilisation and loss absorption. The terms of existing BRRD Financial Instruments (e.g., date of maturity or interest rates payable) could be altered and payments could be suspended.

There can be no assurance that the use of any BRRD resolution tools or powers by the BRRD Resolution Authority or the manner in which they are exercised will not materially adversely affect your rights as a holder of BRRD Financial Instruments, the market value of any investment you may have in BRRD Financial Instruments and/or a BRRD Entity’s ability to satisfy any liabilities or obligations it has to you. You may have a right to compensation from the relevant authorities if the exercise of such resolution powers results in less favourable treatment for you than the treatment that you would have received under normal insolvency proceedings. By accepting any services from Citi, you confirm that you are aware of these risks.

In Canada, Citi Private Bank is a division of Citibank Canada, a Schedule II Canadian chartered bank. References herein to Citi Private Bank and its activities in Canada relate solely to Citibank Canada and do not refer to any affiliates or subsidiaries of Citibank Canada operating in Canada. Certain investment products are made available through Citibank Canada Investment Funds Limited (“CCIFL”), a wholly owned subsidiary of Citibank Canada. Investment Products are subject to investment risk, including possible loss of principal amount invested. Investment Products are not insured by the CDIC, FDIC or depository insurance regime of any jurisdiction and are not guaranteed by Citigroup or any affiliate thereof.

This document is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities to any person in any jurisdiction. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially.

This document is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities to any person in any jurisdiction. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially.

Citigroup, its affiliates and any of the officers, directors, employees, representatives or agents shall not be held liable for any direct, indirect, incidental, special, or consequential damages, including loss of profits, arising out of the use of information contained herein, including through errors whether caused by negligence or otherwise.

CCIFL is not currently a member, and does not intend to become a member of the Mutual Fund Dealers Association of Canada (“MFDA”); consequently, clients of CCIFL will not have available to them investor protection benefits that would otherwise derive from membership of CCIFL in the MFDA, including coverage under any investor protection plan for clients of members of the MFDA.

Bahrain: IN BAHRAIN, CITI PRIVATE BANK OPERATES UNDER SPECIFIC APPROVAL ISSUED ON THE BASIS OF CITIBANK, N.A., BAHRAIN BRANCH’S BANKING LICENSE

Marketing and distribution of Investment Funds to clients in Bahrain requires Notification to the Central Bank of Bahrain and will be limited to UHNWI as defined below. Minimum investment subscription criteria will apply for products for all subscriptions for Bahrain domiciled clients.

Ultra-high net worth investors are:

(a) Individuals who have a minimum net worth (or joint net worth with their spouse) of USD 25 million or more

(b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 25 million; or

(c) Governments, supranational organisations, central banks or other national monetary authorities, and state organisations whose main activity is to invest in financial instruments (such as state pension funds).

GLOBAL CONSUMER BANK (ASIA PACIFIC AND EMEA):

“Citi analysts” refer to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”), Citi Global Wealth Investments (“CGWI”) and voting members of the Citi Global Investment Committee.
Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document.

The information in this document has been obtained from reports issued by CGMI and CGWI. Such information is based on sources CGMI and CGWI believe to be reliable. CGMI and CGWI, however, do not guarantee its accuracy and it may
be incomplete or condensed. All opinions and estimates constitute CGMI and CGWI's judgment as of the date of the report and are subject to change without notice. This document is for general information purposes only and is not intended
as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this document may be reproduced in any manner without the written consent of Citibank N.A. Information in this document has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Investments are not deposits, are not obligations of, or guaranteed or insured by Citibank N.A., Citigroup Inc., or any of their affiliates or subsidiaries, or by any local government or insurance agency, and are subject to investment risk, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currency should be aware
of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of future performance, prices can go up or down. Investment products are not available to US persons. Investors should be aware
that it is his/her responsibility to seek legal and/or tax advice regarding the legal and tax consequences of his/her investment transactions. If an investor changes residence, citizenship, nationality, or place of work, it is his/her responsibility
to understand how his/her investment transactions are affected by such change and comply with all applicable laws and regulations as and when such becomes applicable. Citibank does not provide legal and/or tax advice and is not responsible
for advising an investor on the laws pertaining to his/her transaction.

Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

For more information, please refer to https://www.citivelocity.com/cvr/eppublic/citi_research_disclosures.

MARKET SPECIFIC DISCLOSURES

Market Specific Disclosures

Hong Kong: This communication is distributed in Hong Kong by Citibank (Hong Kong) Limited ("CHKL") and/or Citibank, N.A., Hong Kong Branch (“CBNA HK”, Citibank, N.A. is organized under the laws of U.S.A. with limited liability). CHKL and CBNA HK provide no independent research or analysis in the substance or preparation of this communication. Although information in this communication has been obtained from sources believed to be reliable, CHKL and CBNA HK do not guarantee its accuracy or completeness and accept no liability for any direct or consequential losses arising from its use.

This communication is for general information only, is not intended as a recommendation or an offer or solicitation for the purchase or sale of any products or services and should not be relied upon as financial advice. The information herein
has not taken account of the objectives, financial situation or needs of any particular investor. Any person considering an investment should consider the suitability of the investment having regard to their objectives, financial situation and needs,
and should seek independent advice before making an investment decision. You should obtain and consider the relevant product terms and conditions and risk disclosure statement, and consider if it’s suitable for your objectives, financial situation or needs before making any investment decision. Investors are advised to obtain independent legal, financial and taxation advice prior to investing. Investments are not deposits, are not protected by the Deposit Protection Scheme in Hong Kong
and are subject to investment risk including the possible loss of the principal amount invested.

This communication does not constitute the distribution of any information in any jurisdiction in which it is unlawful to distribute such information to any person in such jurisdiction.

CHKL does not provide discretionary portfolio management services.

Singapore: This communication is distributed in Singapore by Citibank Singapore Limited (“CSL”) to selected Citigold/Citigold Private Clients. CSL provides no independent research or analysis of the substance or in preparation of this communication. Please contact your Citigold/Citigold Private Client Relationship Manager in CSL if you have any queries on or any matters arising from or in connection with this communication. Investment products are not insured under
the provisions of the Deposit Insurance and Policy Owners’ Protection Schemes Act of Singapore and are not eligible for deposit insurance coverage under the Deposit Insurance Scheme.

This communication is for general information only and should not be relied upon as financial advice. The information herein has no regard to the specific objectives, financial situation and particular needs of any specific person and is not intended to be an exhaustive discussion of the strategies or concepts mentioned herein or tax or legal advice. Any person interested in the strategies or concepts mentioned herein should consult their independent tax, legal, financial or other advisors,
as appropriate. This communication does not constitute the distribution of any information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom
it is unlawful to distribute such information or make any offer or solicitation.

Before making any investment, each investor must obtain the investment offering materials, which include a description of the risks, fees and expenses and the performance history, if any, which may be considered in connection with making
an investment decision. Interested investors should seek the advice of their financial adviser about the issues discussed herein as appropriate. Should investors choose not to seek such advice, they should carefully consider the risks associated
with the investment and make a determination based upon the investor’s own particular circumstances, that the investment is consistent with the investor’s investment objectives and assess whether the investment product is suitable for
themselves. Although information in this document has been obtained from sources believed to be reliable, CSL does not guarantee its accuracy or completeness and accept no liability for any direct or consequential losses arising from Its use.

CSL does not provide discretionary portfolio management services.

UAE: This document is distributed in UAE by Citibank, N.A. UAE. Citibank N.A. UAE is licensed by UAE Securities and Commodities Authority (“SCA”) to undertake the financial activity as Promoter under license number 602003.

Citibank N.A. UAE is registered with Central Bank of UAE under license numbers BSD/504/83 for Al Wasl Branch Dubai, 13/184/2019 for Mall of the Emirates Branch Dubai, BSD/2819/9 for Sharjah Branch, and BSD/692/83 for Abu Dhabi Branch.

This is not an official statement of Citigroup Inc. and may not reflect all of your investments with or made through Citibank. For an accurate record of your accounts and transactions, please consult your official statement. Before making any investment, each investor must obtain the investment offering materials, which include a description of the risks, fees and expenses and the performance history, if any, which may be considered in connection with making an investment decision. Each investor should carefully consider the risks associated with the investment and make a determination based upon the investor’s own particular circumstances, that the investment is consistent with the investor’s investment objectives.
At any time, Citigroup companies may compensate affiliates and their representatives for providing products and services to clients.

United Kingdom: This document is distributed in the U.K. by Citibank UK Limited and in Jersey by Citibank N.A., Jersey Branch.

Citibank UK Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our firm’s Financial Services Register number is 805574. Citibank UK Limited
is a company limited by shares registered in England and Wales with registered address at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, Companies House Registration No. 11283101.

Citibank N.A., Jersey Branch is regulated by the Jersey Financial Services Commission. Citi International Personal Bank is registered in Jersey as a business name of Citibank N.A. The address of Citibank N.A., Jersey Branch is P.O. Box 104, 38 Esplanade, St Helier, Jersey JE4 8QB. Citibank N.A. is incorporated with limited liability in the USA. Head office: 399 Park Avenue, New York, NY 10043, USA.

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