By Citi Private Bank,
March 14, 2018
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With many clients underweight global equities, exposure to a new equity index could help them increase allocations
Following a robust, long-term plan is an essential part of building a great portfolio.
Unfortunately, not all clients follow the plans we create for them, with many substantially underweight global equities.
Not following the plan like this can be costly over time.
Two-thirds of client portfolios at Risk Level 3* failed to keep up with our recommended allocation between 2015 and 2017, with underperformance of almost 2% a year.
One of our key messages for 2018 is therefore to build a great portfolio by going global now.
Non-US equities are trading at a discount to US equities – particularly in emerging markets – so we believe that now is the time to seek global equity exposure.
Citi has conceptualized a global equity index comprising ESG-compliant§, high-yield, liquid, low volatility equities from the STOXX Global 1800 Index, tilted towards companies exposed to countries with stronger forecast economic growth. Working with STOXX to implement it, the iSTOXX Global Economic Growth Select 50 Index was launched by STOXX and went live on 17 November 2017.
Seeking exposure to this index may help suitable clients to raise their allocations to global equities. See below to watch a video of Iain Armitage, Citi Private Bank’s Global Head of Capital Markets, in conversation with Quentin Andre, Global Head of Equity Solutions Sales & Structuring at Citi Global Markets.
These materials are purely educational in nature and do not constitute a solicitation or recommendation to make investments in securities.