Opportunities on the Horizon: Investing Through a Slowing Economy

Overview | WEALTH OUTLOOK 2023 | MID-YEAR EDITION | 12 FIGURE 3 : Strategic Return Estimates (SRE) Are Higher ASSET CLASS 2023 SRE 2022 SRE Developed Market Equities 7.0% 3.8% Emerging Market Equities 12.9% 8.1% Investment Grade Fixed Income 4.6% 1.8% High Yield Fixed Income 7.4% 2.6% Emerging Market Fixed Income 7.8% 3.6% Cash 3.4% 0.9% Hedge Funds 9.1% 4.1% Private Equity 17.6% 11.6% Real Estate 10.6% 8.8% Commodities 2.4% 1.5% Source: Citi Global Wealth Investments’ data as of October 31, 2022. Strategic Return Estimates (SRE) based on indices are Citi Global Wealth Investments’ forecast of returns over a 10-year time horizon for specific asset classes (to which the index belongs). Indices are used to proxy for each asset class. Cash refers to the US Cash SRE. The forecast for each specific asset class is made using a proprietary methodology that is appropriate for that asset class. Equity asset classes use a proprietary forecasting methodology based on the assumption that equity valuations revert to their long-term trend over time. The methodology is built around specific valuationmeasures that require several stages of calculation. Assumptions on the projected growth of earnings and dividends are additionally applied to calculate the SRE of the equity asset class. Hedge Fund and Private Equity SREs are linked to equity SREs. Fixed Income asset class forecasts use a proprietary forecasting methodology that is based on current yield levels. Other asset classes use other specific forecasting methodologies. SREs are in US dollars. SREs are generally updated on an annual basis, however they may be updated off cycle based onmarket conditions or methodology adjustments. Strategic Return Estimates are no guarantee of future performance. SREs do not reflect the deduction of client fees and expenses. Future rates of return cannot be predicted with certainty. Investments that pay higher rates of return are often subject to higher risk and greater potential loss in an extreme scenario. The actual rate of return on investments can vary widely. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index. All SRE information shown above is hypothetical not the actual performance of any client account. Hypothetical information reflects the application of a model methodology and selection of securities in hindsight. No hypothetical record can completely account for the impact of financial risk in actual trading.