Consulting Group

GC Research ♦ GWM Investment Strategy Committee

Asset Allocation: The Consulting Group Way

The Global Wealth Management Investment Strategy Committee is made up of senior professionals and noted authorities from across Citigroup Global Wealth Management, comprising Citigroup Investment Research, Citigroup Private Bank and Smith Barney. The Investment Strategy Committee (ISC) provides asset-allocation advice for Citi Smith Barney clients through a disciplined process based on cutting-edge research and a comprehensive analysis of economic and market conditions. By leveraging the ISC's advice with Consulting Group's asset allocation process, Financial Advisors can build a personalized financial plan.

Strategic Asset Allocation

In constructing its model portfolios, the ISC's Asset Allocation Committee first establishes Strategic Allocations for each asset class in a series of efficient portfolios. These Strategic or Normal models represent the blend of assets identified through research as best suited, over the long run, to achieving maximum returns for various degrees of risk tolerance.

Active Asset Allocation

Periodically, the ISC engages in a second type of asset allocation, known as active allocation, that attempts to capitalize on current and prospective developments in the financial markets in the months immediately ahead. For instance, the ISC may recommend over-weighting or under-weighting a particular asset class (always within the context of maintaining a well-diversified portfolio). The Current Allocations in our model portfolios reflect these recommendations. The aim of this periodic "style tilting" is to generate incremental returns over and above those of an already diversified portfolio. Changes in the ISC's Current Allocations typically are gradual and infrequent based on the notion that "market timing" continually shifting money in and out of asset classes to take advantage of fleeting market trends-increases risk and is inefficient. The guidance provided by the Current Allocations serves as a way to maintain a disciplined approach to investing that keeps the mix of assets in a portfolio consistent with an investor's risk profile.

Investment Strategy Committee - Voting Memebers

Guiding the broader committee's analysis and advice are voting members:

W. Don Alexander
Mr. Alexander, the Organization for Economic Cooperation and Development fixed income strategist for Global Wealth Management macroeconomic research, is widely recognized as an expert in foreign exchange and monetary policy. In the 1990s, Euromoney cited his foreign-exchange forecasts and strategy. He joined Citigroup in 1984 and has held adjunct professorships at New York University, where he is currently teaching a class in investing and fixed income. Mr. Alexander holds an M.B.A. in finance and has completed Ph.D. coursework in international finance at Ohio State University.

George Friedlander
Mr. Friedlander, a fixed income strategist, has spent 30 years at Smith Barney and is responsible for municipal-market analysis for institutional clients. He also provides fixed income strategy for high net worth investors and is a nationally recognized authority on the workings of the municipal-bond market. For the past 10 years, he has been named on Institutional Investor's "All-America Research Team."

Francesco Bertoni
Mr. Bertoni, the head of The Tailored Portfolio Group for Citigroup in Europe, the Middle East and Africa, has more than 18 years of experience covering different asset classes and geographical areas as a portfolio manager for private and institutional clients. He joined Citigroup from Invesco Asset Management Limited, where he spent 13 years in senior investment roles, most recently as head of global balanced portfolios and head of emerging markets equities until December 1999.

Edward M. Kerschner, CFA
Mr. Kerschner, the chief investment officer and chairman of the Investment Policy Committee of Citigroup Investment Research, has more than 30 years of experience in the securities industry and has been with Citigroup since 2004. Since 2001, he has been adjunct professor of finance at New York University's Stern School of Business. In October 2000, Institutional Investor magazine called him one of the deans of thematic investing. He received a B.S. from the New York University School of Engineering and Science and an M.B.A. from the Leonard N. Stern School of Business at New York University.

Tobias Levkovich
Mr. Levkovich, the chief US equity strategist of Citigroup Investment Research, has more than 18 years of experience in the investment business and has been with Smith Barney since 1988. Since 2001, he has been responsible for assessing the direction of the US equity markets and sector allocation. He also created the firm's Recommended List. Prior to that, Mr. Levkovich covered the engineering, construction and machinery industries for 13 years. Institutional Investor has named Mr. Levkovich on its list of the nation's leading analysts both as an equity strategist and as an industry analyst. He received a B.A. in commerce from Concordia University, Montreal, and attended Boston University's Graduate School of Management.

Arun Motianey
Mr. Motianey, Citigroup Global Wealth Management head of macroeconomic research, has been with the Private Bank since 1993. Overall, he has more than 20 years of experience in macroeconomic analysis and capital markets research. He was a member of The Citigroup Private Bank Asset Management Committee from its inception in 1998 and now oversees the inputs that are used by the Investment Strategy Committee in its tactical-overlay process. Mr. Motianey has a Ph.D. in mathematical economics from Cambridge University and was a graduate research fellow at King's College, Cambridge, from 1978 to 1982.

Glenn T. Regan, CFA
Mr. Regan, Smith Barney Consulting Group's chief investment officer, is responsible for investment-manager research process for both Smith Barney and The Citigroup Private Bank. He also plays an active role in the investment-related functions for product development. He serves as senior member of the Consulting Group's Investment Advisory Research Committee, which provides research and strategy recommendations. Mr. Regan joined Smith Barney in 1987 and the Consulting Group in 1996. He holds a degree in finance and statistics from the Syracuse School of Management and is a CFA charter holder.

Nicolas Richard, CFA
Mr. Richard, the head of Citigroup Global Wealth Management strategic asset allocation and analytics, has 11 years of industry experience. He was previously with Citigroup Asset Management as a portfolio manager and investment strategist. He holds a master's degree in finance from London Business School, received his undergraduate degree in applied mathematics (actuarial science) from the University of Montreal, and is a CFA charter holder.

Douglas Schindewolf
Mr. Schindewolf, who has more than 20 years of investment experience, heads the tactical asset-allocation initiatives for Global Wealth Management. He is the director of the Consulting Group's asset-allocation research and former head of its Asset Allocation Committee. Prior to that, he held the position of financial economist in the firm's equity-research department. Mr. Schindewolf also served as an associate economist with the Federal Reserve Bank of New York. He received a B.S. in finance from Rider University and a master's degree in economics from New York University.

Although the statements of fact and data herein have been obtained from, and are based upon, sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions included herein constitute the Firm's judgment as of the date indicated and are subject to change without notice. This material is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

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