november 2018 intelligently personalized investment …...our experience over 30 years as a boutique...

Investment management services provided by City National Bank through its wholly-owned subsidiary City National Rochdale, LLC, a registered investment advisor.

Intelligently Personalized Investment ManagementNovember 2018

TABLE OF CONTENTS Introduction

Intelligent Personalization

Investment Competencies

City National Rochdale Overview

INTRODUCTION

*As of July 31, 2018.

+Alternative investments are speculative, may entail substantial risks and may not be suitable for all investors.

Each client has a unique portfolio and personal

benchmark, as well as direct access to a private

Portfolio Manager

Long-term investment management approach

designed to seek competitive performance within a

strong risk management framework

Strategic asset allocation based on our proprietary

research insights

Broad array of investment strategies across

traditional and alternative asset classes

Our Experience

Over 30 years as a boutique investment

management firm serving financial advisors, CPAs,

and their high-net-worth clients

As a fiduciary, we act in the client’s best interest and

provide a foundation for a prudent investment

process

$38 billion* in assets under management

30+ years average professional experience of asset

allocation committee members

Our Philosophy

Clients We Serve Investment Strategies

We specialize in intelligently personalized portfolio

management for high-net-worth individuals,

families, and institutions with more than $1 million

in investable assets

Equities

Core Fixed Income

Opportunistic Income

Real Assets

Alternative Investments+

What Distinguishes City National Rochdale?

INTRODUCTION

Every portfolio is customized to seek the client’s investment objectives and performance goals, not a “one-size-fits-many” model portfolio

80+% of our investment consultants and portfolio managers are CFA charterholders

Investment approach guided by proprietary, forward-looking macroeconomic and capital markets research

Top-down asset allocation guidance coupled with the experience and insight of the portfolio manager

Portfolio is actively managed by strategically rebalancing assets and adjusting allocations

Three levels of active risk management: strategic, dynamic, and personal

Portfolios hold individual securities for potential greater tax efficiency

Direct and ongoing relationship with a private portfolio manager and team

Proprietary tools for portfolio analysis, portfolio management, and risk management

Client

Intelligently Personalized

Portfolios

Experienced Investment

Professionals

Differentiated Investment

Advice

Asset Allocation Discipline

Risk & Tax Management

Direct Access to Private Portfolio Manager

Proprietary Technology

Fiduciary Responsibilities

City National Rochdale adheres to the seven major fiduciary requirements outlined by the Accredited

Investment Fiduciary (AIF®) Global Precepts

INTRODUCTION

Source: fi360, Prudent Practices for Investment Stewards, 2013.

AIF® Global Fiduciary Precepts City National Rochdale

Know standards, laws, and trust provisions Over 30 years of experience managing assets for HNW clients

Diversify assets to specific risk/return profile Intelligent personalization, three levels of portfolio risk management

Prepare investment policy statement Advisor and City National Rochdale collaborate around the Investment

Policy Statement and use it as a guide when building portfolios

Use “prudent experts” (for example, an Investment

Manager) and document due diligence

80+% of our investment consultants and portfolio managers are CFA

charterholders

Control and account for investment expenses Disclosure of fees and expenses

Monitor the activities of “prudent experts” Periodic reviews with Portfolio Managers, advisor and client

Avoid prohibited transactions and avoid or manage

other conflicts of interest in favor of the portfolio Robust internal compliance and control systems, accountability across

all levels of the organization

Ongoing Active Portfolio Management

INTELLIGENT PERSONALIZATION

Asset

Allocation

Committee

Your Financial

Advisor

You

Risk Controls

Your Intelligently Personalized Portfolio

Research

Tax ManagementAsset Class

SpecialistsEconomic Team

Ongoing

Communication

Ongoing

Communication

Your Portfolio

Management

Team

Economic Outlook: Global Growth

The global economy

continues to show signs

of sustainable, but

moderating growth.


Sources: BEA, Standard & Poor’s, Bloomberg. As of November 2018.

City National Rochdale Forecasts 2017 2018e 2019e

GDP Growth 2.30% 2.75%-3.15% 2.25%-2.75%

Corporate Profit Growth 11.30% 18%-20% 5%-7%

Interest RatesFed Funds Rate 1.50% 2.375% 2.875%

Treasury Note, 10-Yr. 2.40% 2.75%-3.25% 2.90%-3.40%

Positive U.S. economic fundamentals include jobs, confidence, corporate profits, and

stable inflation.

Consumers, businesses, and the government all contribute to driving domestic

growth.

Fiscal policy giving a boost to GDP.

We expect one more Fed rate hike this year, for a total of four in 2018.

Global outlook has moderated and become more divergent.

Economic and Financial Indicators

City National Rochdale

indicators show

widespread strength

and continue to signal

moderating but still

healthy U.S. economic

growth ahead.


Indicators Are Forward-Looking Three to Six Months

Source: City National Rochdale. As of November 2018.

Economic and Financial Indicators: Critical Events


Source: City National Rochdale

Past performance is no guarantee of future performance.

January 2008: Start of Recession October 2008: TARP Put Into Action June 2009: End of Recession

August 2011: U.S. Credit Downgrade December 2012: Fiscal Cliff October 2013: Government Shutdown

Moderate Late-Cycle Portfolio Returns Expected

At this stage of the

business cycle, we

expect real returns to

be moderate, with

higher volatility.


Source: City National Rochdale. As of November 2018. Forecasted expected returns represent City National Rochdale’s opinion for these asset

classes, are for illustrative purposes only, and do not represent client returns. The expected returns presented for these asset classes do not reflect

any deductions for City National Rochdale fees or expenses. Actual client portfolio and investment returns will vary.

*Forecasted expected returns for HY Municipal and Municipal FI represent the taxable equivalent return at a 43.4% tax rate.

0

2

4

6

8

10

12

14

16

Core Fixed Income EquitiesBalanced

Portfolio

High Yield

Municipal

6%-7%*

Large Cap

Core

6%-9%

Taxable

Corporate

2.75%-3.75%

Dividend &

Income

6%-8%

Taxable

Opportunistic

5%-6%

EM Asia

8%-12%

Taxable

Gov’t.

2.0-2.50%

Balanced

Portfolio

(60/40)

5%-7%

Municipal

3.0%-5.5%*

Opportunistic

Fixed Income

One-Year Forecasted Expected Returns (%)

Developed

Int’l.

4%-6%

Overweight

Neutral

Underweight

MidSmall

Cap

4%-6%

0%

10%

20%

30%

40%

50%

60%

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90%

100%

12/

31/

1995

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8

Market Volatility Returns to More Moderate Levels for Now…

S&P 500 Volatility Zones

Recurring bouts of excessive volatility over the past 15 years requires investors to rethink their approach to equity

investing. An adjustment to the portfolio’s equity allocation may be necessary to meet risk tolerance


For Illustrative Purposes Only. As of September 30, 2018. City National Rochdale uses Barra Inc.'s Aegis System™ 'Total Risk' data as a measure

of volatility. Barra Inc.'s Aegis System™ is a third party equity risk management software package used to help assess risk/return trade offs.

Mar

ket

Cap

ital

izat

ion

Wei

ghte

d P

erce

nt

in

Cat

ego

ry (

Exc

lud

es U

tilit

ies)

3/29/2000, S&P 1530

10/04/2002, S&P 830

46% decline

10/29/2007, S&P 1620

3/04/2009, S&P 683

57% decline

0%-23% Moderate 24%-29% Elevated 29%-36% High Over 36% Excessive

Level I: Strategic Asset Allocation

Three Levels of Portfolio Risk Management

Risk Management at the Portfolio Design Level

Undertake extensive review of each portfolio’s holdings

to determine how they may fit within overall target

portfolio with regard to contribution to growth and

desired diversification, taking into account the current

gains or losses of each holding

Determine which stocks or funds to hold or sell, and, at

the same time, manage the tax impact

Establish how level III actions will be implemented by

the portfolio manager through discussions with client

to determine the number of metrics (“floors”) that will

be used to trigger monetization of assets to preserve

wealth


Higher

Po

ten

tial

Ret

urn

Lower HigherRisk

Conservative

Moderate

Balanced

Growth

Equity Growth

20%

80%

40%

60%

60%

40%

80%

20%

100%

Stock Funds Bond Funds

Level II: Personalized Dynamic Asset Allocation



Risk Management Driven by Fundamental

and Economic Research

Determine risk budget by establishing dynamic

risk management parameters that reduce equity

exposure at various levels of market decline

Utilize proprietary capital markets outlook and

economic & financial models to adjust financial

allocations

Tactically overweight/underweight risk exposures

Political Environment

- 0 +Fall 0 Rise

Energy/Oil CostsCompany Guidance

- 0 +

Equity Market Valuation

UA 0 A

Interest Rates/ Fixed Income

Fall 0 Rise

-20

-15

-10

-5

0

5

10

15

20

Valuation Economic Outlook Corporate Profits


70%

65%

60%

55%

35%

40%

50%

45%

30%-20

-15

-10

-5

0

5

10

15

20



-20

-15

-10

-5

0

5

10

15

20



70%

65%

60%

55%

35%

40%

50%

45%

30%

Normal Policy Allocation

Rebalanced Equity Target %

Under

Over

Extreme Risk Normal Risk

Level III: Personalized Downside Risk Management



Risk Management Focused on Non-Normal

Periods & Client’s Personal Downside Limits

Monetize assets as established “floors” are

approached and begin reinvesting

Provide limit/control on overall volatility and

downside potential of portfolio during severe

market declines

Through communication with client continually

evaluate whether the risk of each investment

portfolio is consistent with the client’s risk tolerance

and/or risk budget and whether additional risk

mitigation steps are required

Buy & Hold

EXTREME RISK: Rare Occurrence

Stock Market Value

Port

folio

Valu

e

$3,887,000

NORMAL RISK: Most of the time during full market cycles

Buy & Hold

Buy & Hold

“FLOOR”

BELOW “NORMAL”$5,607,000

$5,225,000 Reduce Market Exposure Dynamically: Steps Taken to Remove Risk

HEIGHTENED RISK: Occurs Sporadically

-18%

-12%

-39%

“Buy & Hold”Buy & Hold

EXTREME RISK: Rare Occurrence

Stock Market Value

Port

folio

Valu

e

$3,887,000

NORMAL RISK: Most of the time during full market cycles

Buy & Hold

Buy & Hold

“FLOOR”

BELOW “NORMAL”$5,607,000

$5,225,000 Reduce Market Exposure Dynamically: Steps Taken to Remove Risk

HEIGHTENED RISK: Occurs Sporadically

-18%

-12%

-39%

“Buy & Hold”

-39% -24% -18%

Extreme Risk Normal Risk

Raise Cash to Manage and Mitigate Risk


Source: City National Rochdale, LLC. FOR ILLUSTRATIVE PURPOSES ONLY.

The chart represents City National Rochdale’s historic implementation of a methodology used to determine

when cash was raised in the Large Cap and Mid Cap portfolio strategies for the periods shown above. These

do not represent actual City National Rochdale client portfolios. Client portfolios will not perform in the same

manner as the ones depicted in this chart. Clients should not interpret this to indicate how City National

Rochdale will currently manage their investment accounts.

1Portfolios used in this graph are comprised of City National Rochdale’s Large Cap & Mid Cap investment

strategies with an 80/20 split between Large Cap & Mid Cap investment strategies, respectively. The

portfolios are represented by model portfolios and do not purport to depict any actual prior client experience.

*Reflects actual cash holdings under management, including funds set aside for transactional purposes,

upcoming portfolio disbursements, new account holdings, account liquidations, etc. Cash allocation targets

from a portfolio strategy perspective could be significantly lower.

Past performance is no guarantee of future performance. As of December 31, 2012.

Historic Implementation

High-Net-Worth Large Cap & Mid Cap Strategies1

(Critical Event Periods October 1, 2007-December 31, 2012)

Current Methodology

Targeted Portfolio Cash Levels

(Balanced Portfolio2)

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Oct

-07

Jan

-08

Ap

r-08

Jul-

08

Oct

-08

Jan

-09

Ap

r-09

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Portfolio Cash* (Left Axis)

City National Rochdale Recession Monitor (Left Axis)

S&P 500 (Right Axis)

0%

20%

40%

60%

80%

100%

Late Cycle MildRecession

AverageRecession

SevereRecession…

Risk Level

0%-10%

20%-30%

10%-20%

≥30%

Source: City National Rochdale, LLC.

Targeted portfolio cash levels are derived from the outcomes of City National Rochdale’s proprietary

economic forecasts and monitors.

2A City National Rochdale Balanced portfolio assumes a 60/40 split between Equities and Fixed

Income asset classes.

Actual client portfolio target cash allocations will vary.

As of November 2018.

FOR ILLUSTRATIVE PURPOSES ONLY.

This is a sample analysis and does not represent an actual portfolio.

INTELLIGENTLY PERSONALIZED IMPLEMENTATION

City National Bank provides investment management services in conjunction with City National Rochdale, LLC, its wholly-owned subsidiary.

Attached herein are communications prepared by City National Rochdale that reflect City National Bank's investment products and

services.

The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. This presentation is not

an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein.

Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual

results and are based primarily upon a hypothetical set of assumptions applied to certain historical financial information. Certain

information has been provided by third-party sources and, although believed to be reliable, it has not been independently verified and its

accuracy or completeness cannot be guaranteed.

Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as on the date of this document and are

subject to change.

As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Your actual

returns will vary, and loss of principal is a possibility. All investing is subject to risk, including the possible loss of the money you invest.

Future return and downside risk are City National Rochdale’s forecasts for a particular asset class and not any individual security. They are

not a representation by City National Rochdale that they will actually be realized. City National Rochdale cannot predict future results. Future

rates of return and downside risk may be greater or less than City National Rochdale’s forecast. Please see the Monte Carlo Assumptions and

Limitations at the end of this presentation.

The expected returns are net of any City National Rochdale management fees, however other fees may apply. The expected returns do

not include fees for trading costs (i.e., commissions) or any fees charged by your financial advisor. Please speak to your financial advisor for

a complete understanding of all fees.

Diversification may not protect against market loss or risk. All investing is subject to risk, including the possible loss of the money you invest.


Important Disclosures




Asset Allocation by Asset Group Summary

Current Portfolio Overview




Portfolio Comparison by Asset Group Graph

Portfolio Analysis




Portfolio Analysis Overview




Cash Flow Analysis




Domestic Individual Equities





Detailed Asset List by Asset Groups





Stock Overlap Snapshot

Mutual Fund Analysis




Economic Sector Analysis

Standard Portfolio: Large Cap Core Equity Overview


This is a sample analysis and does not represent an actual portfolio

Please note that Large Cap Core Equity was previously referred to as U.S. Core Equity.


Economic Sector Analysis

Standard Portfolio: HDI Overview




Current Portfolio: Volatility Analysis Overview




Current Portfolio: Fixed Income Tax Exempt Overview




Current Portfolio: Fixed Income Analysis




Current Portfolio: Fixed Income Analysis – Funds




Investment Strategy Graph

Portfolio Analysis




Portfolio Comparison by Asset Group

Portfolio Analysis




Wealth Simulation Graph Comparison – Including Withdrawals

Projected Portfolio Results




Return Attributes of Actual Portfolio

Cash Flow Schedule




Return Attributes of PAA1

Cash Flow Schedule





Cash Flow Schedule




Monte Carlo Assumptions




Important Information




The Importance of Asset Allocation




Capital Market Assumptions

Client Profile




The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. This p resentation is not an offer to buy or sell, or a solicitation of

any offer to buy or sell any of the securities mentioned herein.

Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results and are based primarily upon a

hypothetical set of assumptions applied to certain historical financial information. Certain information has been provided b y third-party sources and, although believed to be reliable,

it has not been independently verified and its accuracy or completeness cannot be guaranteed .

Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as on the date of this document and are subject to change.

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other gove rnment agency. Although a money market fund

seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money marke t fund.

City National Rochdale Funds are distributed by SEI Investments Distribution Co., which is not affiliated with City National Bank or any of its affiliates.

Alternative investments are speculative, may entail substantial risks, offer limited or no liquidity and may not be suitable for all investors.

Private investments often engage in leveraging and other speculative investment practices that may increase the risk of inves tment loss, can be highly illiquid, are not required to

provide periodic pricing or valuation information to investors, and may involve complex tax structures and delays in distribu ting important tax information.

As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money.

Diversification may not protect against market loss or risk.

All investing is subject to risk, including the possible loss of the money you invest.

Indices are unmanaged and one cannot invest directly in an index. Index returns do not reflect a deduction for fees or expen ses.



For More InformationNew York Headquarters

400 Park Avenue

New York, NY 10022

212-702-3500

Beverly Hills Headquarters

400 North Roxbury Drive

Beverly Hills, CA 90210

310-888-6000

[email protected]

www.cnr.com

november 2018 intelligently personalized investment …...our experience over 30 years as a boutique...

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