Citibank’s diversification shines amid downturn
Citibank Korea’s wealth management strategy, which centers on diversifying investments, has gained attention as it has generated stable returns for investors despite lingering uncertainties caused by the U.S.-China trade war and Korea’s trade feud with Japan.
Since 2015, the bank has stressed the importance of asset allocation and currency diversification based on a Citi Model Portfolio built for each customer’s risk profile, offered by the Global Investment Committee.
This strategy has resulted in remarkable performance since the latter half of 2018, when the stock market began to slow with market uncertainty increasing.
The bank’s moderate-type Citi Model Portfolio and aggressive-type Citi Model Portfolio recorded 7.0 percent and 8.1 percent rates of return respectively for the year.
The two portfolios have performed relatively well while most stock markets have posted a significant level of negative returns over the past year.
“Citi’s Model Portfolio’s return on revenue (ROR) is not highly volatile during investment periods. Instead of a high ROR, it provides steady and stable profits,” said Ji-Kang Kim, head of retail banking.
The bank selects funds to comprise the assets in the Model Portfolio based on market outlook reports and investment themes, offered every quarter by the Global Investment Committee, helping investors create their own portfolio.
Meanwhile, the proportion of the bank’s foreign-currency assets under management increased from 17 percent in early 2018 to 34 percent at the end of August 2019. In particular, investment in overseas bonds has more than doubled over the past 12 months.
A Citibank Korea employee discusses wealth management with a customer in this file photo.