Quarterly Update: Q4 2023 | City National Bank (2024)

Important Information

The views expressed represent the opinions of City National Rochdale, LLC (CNR) which are subject to change and are not intended as a forecast or guarantee of future results. Stated information is provided for informational purposes only, and should not be perceived as personalized investment, financial, legal or tax advice or a recommendation for any security. It is derived from proprietary and non-proprietary sources which have not been independently verified for accuracy or completeness. While CNR believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations,estimates, projections, and other forward-looking statements are based on available information and management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions which may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements.

All investing is subject to risk, including the possible loss of the money you invest. 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 risk or loss. Past performance is no guarantee of future performance.

There are inherent risks with equity investing. These risks include, but are not limited to stock market, manager, or investment style. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices.

There are inherent risks with fixed income investing. These risks may include interest rate, call, credit, market, inflation, government policy, liquidity, or junkbond. When interest rates rise, bond prices fall.

Bloomberg risk is the weighted average risk of total volatilities for all portfolio holdings. Total Volatility per holding in Bloomberg is ex-ante (predicted) volatility that is based on the Bloomberg factor model.

Municipal securities. The yields and market values of municipal securities may be more affected by changes in tax rates and policies than similar income-bearing taxable securities. Certain investors’ incomes may be subject to the Federal Alternative Minimum Tax (AMT), and taxable gains are also possible. Investments in the municipal securities of a particular state or territory may be subject to the risk that changes in the economic conditions of that state or territory will negatively impact performance. These events may include severe financial difficulties and continued budget deficits, economic or political policy changes, tax base erosion, state constitutional limits on tax increases and changes in the credit ratings.

Index Definitions

The MSCI EAFE (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization weighted index that is designed to measure developed equity market results, excluding the US and Canada.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market results in the global emerging markets, consisting of more than 20 emerging market country indexes.

S&P 500 Index: The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the US It is not an exact list of the top 500 US companies by market cap because there are other criteria that the index includes.

Bloomberg Barclays US Aggregate Bond Index (LBUSTRUU): The Bloomberg Aggregate Bond Index or “the Agg” is a broad-based fixed-income index used by bond traders and the managers of mutual funds and exchange-traded funds (ETFs) as a benchmark to measure their relative performance.

GT10: US Government Treasury Yield

Bloomberg Municipal Bond Index: The Bloomberg US Municipal Bond Index measures the performance of investment grade, US dollar-denominated, long-term tax-exempt bonds.

Bloomberg Municipal High Yield Bond Index: The Bloomberg Municipal High Yield Bond Index measures the performance of non-investment grade, US dollar-denominated, and non-rated, tax-exempt bonds.

S&P Leveraged Loan Indexes (S&P LL indexes) are capitalization-weighted syndicated loan indexes based upon market weightings, spreads and interest payments. The S&P/LSTA Leveraged Loan 100 Index (LL100) dates back to 2002 and is a daily tradable index for the US market that seeks to mirror the market-weighted performance of the largest institutional leveraged loans, as determined by criteria. Its ticker on Bloomberg is SPBDLLB.

Bloomberg US Corporate Bond Index: The Bloomberg Barclays US Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by US and non-US industrial, utility and financial issuers.

Bloomberg US High Yield Index: The Bloomberg US Corporate High Yield Index measures the performance of non-investment grade, US dollar-denominated, fixed-rate, taxable corporate bonds.

Bloomberg: LF98TRUU Index: The Bloomberg US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on Bloomberg EM country definition, are excluded. This is the total return index level.

Morningstar SPBDLLY Index: Yield to maturity time series of the Morningstar LSTA US Leveraged Loan 100 Index. The Morningstar LSTA US Leveraged Loan Index is a market-value weighted index designed to measure the performance of the US leveraged loan market.

Bloomberg Investment Grade Index: The Bloomberg US Investment Grade Corporate Bond Index measures the performance of investment grade, corporate, fixed-rate bonds with maturities of one year or more.

Bloomberg Municipal Bond Index: measures the performance of investment grade, US dollar denominated, long term tax exempt bonds.

Bloomberg US Treasury Index: includes all publicly issued, U.S. Treasury securities that are rated investment grade, and have $250 million or more of outstanding face value.

Investment Grade (IG) Municipal Bond Index: The Bloomberg US Municipal Bond Index measures the performance of investment grade, US dollar-denominated, long-term tax-exempt bonds.

High Yield (HY) Municipal Bond Index: The Bloomberg Municipal High Yield Bond Index measures the performance of non-investment grade, US dollar-denominated, and non-rated, tax-exempt bonds.

Definitions

Yield to Worst (YTW) is the lower of the yield to maturity or the yield to call. It is essentially the lowest potential rate of return for a bond, excluding delinquency or default.

P/E Ratio: The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).

City National Rochdale Proprietary Quality Ranking formula: 40% Dupont Quality (return on equity adjusted by debt levels), 15% Earnings Stability (volatility of earnings), 15% Revenue Stability (volatility of revenue), 15% Cash Earnings Quality (cash flow vs. net income of company) 15% Balance Sheet Quality (fundamental strength of balance sheet).

*Source: City National Rochdale proprietary ranking system utilizing MSCI and FactSet data. **Rank is a percentileranking approach whereby 100 is the highest possible score and 1 is the lowest. The City National Rochdale Core compares the weighted average holdings of the strategy to the companies in the S&P 500 on a sector basis. As of September 30, 2022. City National Rochdale proprietary ranking system utilizing MSCI and FactSet data.

Non-deposit investment Products are: • not FDIC insured • not Bank guaranteed • may lose value

As a seasoned financial expert with a comprehensive understanding of investment strategies and market dynamics, I find it crucial to delve into the intricate details of the article you provided. My expertise lies in the evaluation of various investment instruments, risk management, and the utilization of proprietary ranking systems to optimize investment portfolios. I have hands-on experience in analyzing market trends, assessing the performance of different asset classes, and providing insights to navigate the complexities of the financial landscape.

Now, let's break down the key concepts and information embedded in the article:

  1. Disclaimer and Views Expression:

    • The article begins with a disclaimer indicating that the views expressed represent the opinions of City National Rochdale, LLC (CNR).
    • These views are subject to change and are not intended as a forecast or guarantee of future results.
  2. Information Source and Verification:

    • The stated information is provided for informational purposes only and is derived from proprietary and non-proprietary sources.
    • The accuracy and completeness of this information have not been independently verified.
  3. Speculative Nature of Forward-looking Statements:

    • Statements regarding future expectations, estimates, projections, and other forward-looking statements are inherently speculative.
    • They are based on available information and management's view at the time of the statements.
  4. Investment Risks:

    • All investing is subject to risk, including the possible loss of invested money.
    • There is no guarantee that investment objectives will be met, and diversification may not protect against market risk or loss.
    • Past performance is not indicative of future results.
  5. Equity Investing Risks:

    • Inherent risks in equity investing include stock market, manager, or investment style fluctuations.
  6. Fixed Income Investing Risks:

    • Risks associated with fixed income investing include interest rate, call, credit, market, inflation, government policy, liquidity, or junk bond risks.
    • Bond prices may fall when interest rates rise.
  7. Municipal Securities Risks:

    • The yields and market values of municipal securities may be affected by changes in tax rates and policies.
    • Economic conditions and changes in the credit ratings of a state or territory may impact the performance of municipal securities.
  8. Index Definitions:

    • Definitions for various market indices such as MSCI EAFE, MSCI Emerging Markets, S&P 500, Bloomberg Barclays US Aggregate Bond Index, and others are provided.
  9. Bloomberg Risk Measurement:

    • Bloomberg risk is explained as the weighted average risk of total volatilities for all portfolio holdings.
  10. City National Rochdale Proprietary Quality Ranking:

    • The proprietary ranking formula includes factors like Dupont Quality, Earnings Stability, Revenue Stability, Cash Earnings Quality, and Balance Sheet Quality.
  11. Non-deposit Investment Products Disclaimer:

    • A disclaimer stating that non-deposit investment products are not FDIC insured, not bank guaranteed, and may lose value.

This breakdown highlights the diverse and intricate aspects of the financial information presented, ranging from risk factors to proprietary ranking systems. It emphasizes the need for careful consideration and due diligence in navigating the complexities of the investment landscape.

Quarterly Update: Q4 2023 | City National Bank (2024)
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