Citibank’s diver­si­fi­ca­tion shines amid down­turn

The Korea Times - - FINANCE -

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.

Cour­tesy of Citibank

A Citibank Korea em­ployee dis­cusses wealth man­age­ment with a cus­tomer in this file photo.

Newspapers in English

Newspapers from Korea, Republic

© PressReader. All rights reserved.