One of the largest financial services companies in the world, Citicorp (C) is also the parent company of one of the oldest banks in the U.S., Citibank, which can trace its roots back to the City Bank of New York, founded in 1812. Citibank today has more than 2,600 branch locations in 19 countries, although most of its operations are focused in the United States and Mexico.

Formed by the merge of Citicorp and Travelers Group in 1998, Citicorp’s business can today be split in two – investment banking and financial services, both tied to each of the original partner companies. Citicorp is the third largest bank in the U.S. and is considered a “systemically important financial institution” by U.S. regulators, placing it on the “too big to fail” list, leading to its government bailout in 2009.

As of 2019, Citi has more than 200 million customer accounts and offices in more than 160 countries. Its revenues for 2018 totaled more than $72 billion.

Rationale

As a Big 4 financial institution, naturally the simplest way to gain exposure to Citicorp is to buy its listed shares. But given Citi’s rocky history in recent years, that can open investors up to excess risk. Citicorp was the recipient of more than $300 billion in bailout funds in the wake of the 2008 financial crisis and, although operations have stabilized since then, its business is largely left to the whims of the global financial system. Given its size, there is little Citigroup can do to outperform its peers directly.

A solution that can dampen some of that volatility is to buy funds that provide exposure to Citicorp and other similar firms, rather than C shares themselves. After all, the return drivers that will benefit Citi might also benefit other similar firms in financial services. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like C through these types of funds.

Investing in C

A search on Magnifi suggests that investors can gain access to C via a number of different funds and ETFs, including those shown below. 

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