Citibank Building 402 East Marine Drive, Suite 100 Hagatna, GU 96910 Tel 671-475-8821 Fax 671-475-8829
Citi Global Wealth Management Investment Strategy Committee Announces Asset Allocation Change At its recent February 2007 meeting, the Citi Global Wealth Management Investment Strategy Committee recommended some changes to the Active Recommendations in its model portfolios. The following changes are effective today, Friday, February 23, 2007: • • • • Stocks are being increased to full overweight from partial overweight. Bonds are being reduced to full underweight from partial underweight. Emerging Market stocks are increasing to neutral from partial underweight in balanced model portfolios. Non-U.S. bonds will be a primary source for additional underweight in Bonds.
The Committee noted the following key economic points as significant factors in their analyses and recommendations: • • • • • • An assumption that U.S. economic growth is likely to accelerate over the course of 2007 as the drag from the housing-sector downturn dissipates. A "soft landing" seems more assured. An assumption that core inflation is likely to moderate over the course of 2007. The pace of growth in developing economies is likely to moderate. In Japan, expectations for economic growth are likely to remain somewhat above its long-term "potential." Core inflation is likely to remain minimal in 2007. The Federal Reserve Board's policy stance appears to be roughly "neutral" and it is expected to hold policy rates steady for the next several months. The Bank of Japan is likely to very gradually raise official rates during 2007. Expectations for the European Central Bank are that it will also continue raising official rates in 2007. The Bank of England is likely to raise official rates slightly further this year as well.
Please contact us to discuss the recommended changes and the rebalancing strategies. In light of the significant movements that have occurred in certain sectors in the past year or so, this may be an excellent time to review your portfolios and your long-term diversification objectives. Sincerely, Daniel A. Roland, CIMA® Senior Vice President – Wealth Management Senior Institutional Consultant Jason B. Miyashita, CRPS®, AIF® Financial Advisor Financial Planning Specialist
Citigroup Global Markets Inc.
THE INFORMATION SET FORTH WAS OBTAINED FROM SOURCES WHICH WE BELIEVE RELIABLE BUT WE DO NOT GUARANTEE ITS ACCURACY OR COMPLETENESS. NEITHER THE INFORMATION NOR ANY OPINION EXPRESSED CONSTITUTES A SOLICITATION BY US OF THE PURCHASE OR SALE OF ANY SECURITIES.