Investment Style Guide

Investment Style Guide September 17, 16 Dr. Edward Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-36 jabbott@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents Index Price Performance: 16 1 Index Price Performance: 2 S&P Growth/Value Relative Price Performance 3 S&P Pure Growth/Pure Value Relative Price Performance 4 Growth/Value Relative Forward Revenues & Earnings Market Cap: S&P Earnings & Valuation 6 Market Cap: S&P, 4, 6 7-8 Market Cap: Russell 1 vs. 9 Growth vs. Value: Revenue Squiggles 1 Growth vs. Value: Earnings Squiggles 11 Growth vs. Value: Profit Margins 12 Growth vs. Value: Earnings Growth 13 Growth vs. Value: S&P Valuation 14- Growth vs. Value: Market Cap Shares 16 Growth vs. Value: Net Earnings Revisions 17 Russell Large, Small, Growth, Value 18-21 Russell Valuation SmallCap, Growth, Value 22 September 17, 16 / Investment Style Guide www.

1 Figure 1. Index Price Performance: 16 LARGECAP & SMIDCAP PERFORMANCE: 16 (percent change ytd) Latest data thru: 9/16/16 1 - -1 - S&P LargeCap (4.7) S&P 4 MidCap (8.8) S&P 6 SmallCap (1.2) Russell 1 LargeCap (.1) Russell MidCap (6.9) Russell SmallCap (8.) - -1 - - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 16 Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - Figure 2. GROWTH & VALUE PERFORMANCE: 16 (percent change ytd) Latest data thru: 9/16/16 1 1 - -1 - - S&P LargeCap Growth (3.9) S&P LargeCap Value (.) S&P 4 MidCap Growth (7.) S&P 4 MidCap Value (1.1) S&P 6 SmallCap Growth (8.7) S&P 6 SmallCap Value (11.9) Russell 1 LargeCap Growth (3.7) Russell 1 LargeCap Value (6.6) Russell MidCap Growth (4.3) Russell MidCap Value (9.4) Russell SmallCap Growth (.2) Russell SmallCap Value (1.8) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 16 Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - -1 - - Page 1 / September 17, 16 / Investment Style Guide www.

1 Figure 3. Index Price Performance: LARGECAP & SMIDCAP PERFORMANCE: (percent change ytd) 1 - -1 S&P LargeCap (3.9) S&P 4 MidCap (4.7) S&P 6 SmallCap (6.) Russell 1 LargeCap (4.) Russell MidCap (2.6) Russell SmallCap (1.9) - -1 - Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - Figure 4. GROWTH & VALUE PERFORMANCE: (percent change ytd) 1 1 - -1 - S&P LargeCap Growth (7.8) S&P LargeCap Value (-.4) S&P 4 MidCap Growth (8.3) S&P 4 MidCap Value (.8) S&P 6 SmallCap Growth (1.3) S&P 6 SmallCap Value (2.8) Russell 1 LargeCap Growth (7.9) Russell 1 LargeCap Value (.) Russell MidCap Growth (3.) Russell MidCap Value (1.9) Russell SmallCap Growth (3.1) Russell SmallCap Value (.4) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: Frank Russell Company, Haver Analytics, and Standard & Poor s Corporation. - -1 - Page 2 / September 17, 16 / Investment Style Guide www.

.7.6 S&P Growth/Value Relative Price Performance Figure. RELATIVE PRICE INDEX: S&P GROWTH & VALUE (relative to S&P ) Rising line indicates that the index is outperforming the S&P.7.6.6. Growth relative to S&P Value relative to S&P 9/16.6....4 9/16.4.4.4.3 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Standard & Poor s Corporation and Haver Analytics..3 1.9 1.8 1.7 Figure 6. RELATIVE PRICE INDEX: S&P GROWTH & VALUE (Growth price index relative to Value price index) Rising line indicates that Growth is outperforming Value 1.9 1.8 1.7 1.6 1.6 1. 1. 1.4 1.3 9/16 1.4 1.3 1.2 1.2 1.1 1.1 1. 1..9.8 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Standard & Poor s Corporation and Haver Analytics..9.8 Page 3 / September 17, 16 / Investment Style Guide www.

S&P Pure Growth/Pure Value Relative Price Performance 4.2 4. 3.7 3. Figure 7. RELATIVE PRICE INDEX: S&P PURE GROWTH & PURE VALUE (relative to S&P ) Rising line indicates that the index is outperforming the S&P 9/16 4.2 4. 3.7 3. 3.2 3. 2.7 Pure Growth relative to S&P Pure Value relative to S&P 3.2 3. 2.7 2. 2.2 2. 1.7 1. 1.2 1..7 9/16 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Standard & Poor s Corporation and Haver Analytics. 2. 2.2 2. 1.7 1. 1.2 1..7 3. 3.2 3. Figure 8. RELATIVE PRICE INDEX: S&P PURE GROWTH & PURE VALUE (Pure Growth price index relative to Pure Value price index) Rising line indicates that Pure Growth is outperforming Pure Value 3. 3.2 3. 2.7 2.7 2. 2. 2.2 2.2 2. 2. 1.7 1. 9/16 1.7 1. 1.2 1.2 1..7 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Standard & Poor s Corporation and Haver Analytics. 1..7 Page 4 / September 17, 16 / Investment Style Guide www.

4 6 7 8 9 1 11 12 13 14 16 17.3.4.4...6.6.7.7.8.8.9.9 1. 1. 1.1 1. 1. 1.2 1.3 1.3 1.4 1.4 1. 1. 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 2. 2. 2.1 2. 2. 2.2 2.3 2.3 2.4 2.4 2. 2. 2.6 2.6 2.7 2.7 2.8 2.8 2.9 2.9 3. 3. 3.1 3. 3. 3.2 3.3 3.3 3.4 3.4 3. 3. 3.6 3.6 3.7 3.7 3.8 3.8 3.9 3.9 4. 4. 4.1 4. 4. 4.2 4.3 4.3 4.4 4.4 4. 4. 4.6 4.6 4.7 4.7 4.8 4.8 4.9 4.9...1...2.3.3.4.4...6.6.7.7.8.8.9.9 6. 6. 6.1 6. 6. 6.2 6.3 6.3 6.4 6.4 6. 6. 6.6 6.6 6.7 6.7 6.8 6.8 6.9 6.9 7. 7. 7.1 7. 7. 7.2 7.3 7.3 7.4 7.4 7. 7. 7.6 7.6 7.7 7.7 7.8 7.8 7.9 7.9 8. 8. 8.1 8. 8. 8.2 8.3 8.3 8.4 8.4 8. 8. 8.6 8.6 8.7 8.7 8.8 8.8 8.9 8.9 9. 9. 9.1 9. 9. 9.2 9.3 9.3 9.4 9.4 9. 9. 9.6 9.6 9.7 9.7 9.8 9.8 9.9 9.9 1. 1. 1.1 1. 1. 1.2 1.3 1.3 1.4 1.4 1. 1. 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 11. 11. 11.1 11. 11. 11.2 11.3 11.3 11.4 11.4 11. 11. 11.6 11.6 11.7 11.7 11.8 11.8 11.9 11.9 12. 12. 12.1 12. 12. 12.2 12.3 12.3 12.4 12.4 12. 12. 12.6 12.6 12.7 12.7 12.8 12.8 12.9 12.9 13. 13. 13.1 13. 13. 13.2 13.3 13.3 13.4 13.4 13. 13. 13.6 13.6 13.7 13.7 13.8 13.8 13.9 13.9 14. 14. 14.1 14. 14. 14.2 14.3 14.3 14.4 14.4 14. 14. 14.6 14.6 14.7 14.7 14.8 14.8 14.9 14.9...1...2.3.3.4.4...6.6.7.7.8.8.9.9 16. 16. 16.1 16. 16. 16.2 16.3 16.3 16.4 16.4 16. 16. 16.6 16.6 16.7 16.7 16.8 16.8 16.9 16.9 17. 17. 17.1 17. 17. 17.2 17.3 17.3 17.4 17.4 17. 17. 17.6 17.6 17.7 17.7 17.8 17.8 17.9 17.9 18. 18. 18.1 18. 18. 18.2 18.3 18.3 18.4 18.4 18. 18. 18.6 18.6 18.7 18.7 18.8 18.8 18.9 18.9 19. 19. 19.1 19. 19. 19.2 19.3 19.3 19.4 19.4 19. 19. 19.6 19.6 19.7 19.7 19.8 19.8 19.9 19.9...1...2.3.3.4.4...6.6.7.7.8.8.9.9 21. 21. 21.1 21. 21. 21.2 21.3 21.3 21.4 21.4 21. 21. 21.6 21.6 21.7 21.7 21.8 21.8 21.9 21.9 22. 22. 22.1 22. 22. 22.2 22.3 22.3 22.4 22.4 22. 22. 22.6 22.6 22.7 22.7 22.8 22.8 22.9 22.9 23. 23. 23.1 23. 23. 23.2 23.3 23.3 23.4 23.4 23. 23. 23.6 23.6 23.7 23.7 23.8 23.8 23.9 23.9 24. 24. 24.1 24. 24. 24.2 24.3 24.3 24.4 24.4 24. 24. 24.6 24.6 24.7 24.7 24.8 24.8 24.9 24.9 2. 2. 2.1 2. 2. 2.2 2.3 2.3 2.4 2.4 2. 2. 2.6 2.6 2.7 2.7 2.8 2.8 2.9 2.9 26. 26. 26.1 26. 26. 26.2 26.3 26.3 26.4 26.4 26. 26. 26.6 26.6 26.7 26.7 26.8 26.8 26.9 26.9 27. 27. 27.1 27. 27. 27.2 27.3 27.3 27.4 27.4 27. 27. 27.6 27.6 27.7 27.7 27.8 27.8 27.9 27.9 28. 28. 28.1 28. 28. 28.2 28.3 28.3 28.4 28.4 28. 28. 28.6 28.6 28.7 28.7 28.8 28.8 28.9 28.9 29. 29. 29.1 29. 29. 29.2 29.3 29.3 29.4 29.4 29. 29. 29.6 29.6 29.7 29.7 29.8 29.8 29.9 29.9 3. 3. 3.1 3. 3. 3.2 3.3 3.3 3.4 3.4 3. 3. 3.6 3.6 3.7 3.7 3.8 3.8 3.9 3.9 31. 31. 31.1 31. 31. 31.2 31.3 31.3 31.4 31.4 31. 31. 31.6 31.6 31.7 31.7 31.8 31.8 31.9 31.9 32. 32. 32.1 32. 32. 32.2 32.3 32.3 32.4 32.4 32. 32. 32.6 32.6 32.7 32.7 32.8 32.8 32.9 32.9 33. 33. 33.1 33. 33. 33.2 33.3 33.3 33.4 33.4 33. 33. 33.6 33.6 33.7 33.7 33.8 33.8 33.9 33.9 34. 34. 34.1 34. 34. 34.2 34.3 34.3 34.4 34.4 34. 34. 34.6 34.6 34.7 34.7 34.8 34.8 34.9 34.9 3. 3. 3.1 3. 3. 3.2 3.3 3.3 3.4 3.4 3. 3. 3.6 3.6 3.7 3.7 3.8 3.8 3.9 3.9 36. 36. 36.1 36. 36. 36.2 36.3 36.3 36.4 36.4 36. 36. 36.6 36.6 36.7 36.7 36.8 36.8 36.9 36.9 37. 37. 37.1 37. 37. 37.2 37.3 37.3 37.4 37.4 37. 37. 37.6 37.6 37.7 37.7 37.8 37.8 37.9 37.9 38. 38. 38.1 38. 38. 38.2 38.3 38.3 38.4 38.4 38. 38. 38.6 38.6 38.7 38.7 38.8 38.8 38.9 38.9 39. 39. 39.1 39. 39. 39.2 39.3 39.3 39.4 39.4 39. 39. 39.6 39.6 39.7 39.7 39.8 39.8 39.9 39.9 4..3.4.4...6.6.7.7.8.8.9.9 1. 1. 1.1 1. 1. 1.2 1.3 1.3 1.4 1.4 1. 1. 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 2. 2. 2.1 2. 2. 2.2 2.3 2.3 2.4 2.4 2. 2. 2.6 2.6 2.7 2.7 2.8 2.8 2.9 2.9 3. 3. 3.1 3. 3. 3.2 3.3 3.3 3.4 3.4 3. 3. 3.6 3.6 3.7 3.7 3.8 3.8 3.9 3.9 4. 4. 4.1 4. 4. 4.2 4.3 4.3 4.4 4.4 4. 4. 4.6 4.6 4.7 4.7 4.8 4.8 4.9 4.9...1...2.3.3.4.4...6.6.7.7.8.8.9.9 6. 6. 6.1 6. 6. 6.2 6.3 6.3 6.4 6.4 6. 6. 6.6 6.6 6.7 6.7 6.8 6.8 6.9 6.9 7. 7. 7.1 7. 7. 7.2 7.3 7.3 7.4 7.4 7. 7. 7.6 7.6 7.7 7.7 7.8 7.8 7.9 7.9 8. 8. 8.1 8. 8. 8.2 8.3 8.3 8.4 8.4 8. 8. 8.6 8.6 8.7 8.7 8.8 8.8 8.9 8.9 9. 9. 9.1 9. 9. 9.2 9.3 9.3 9.4 9.4 9. 9. 9.6 9.6 9.7 9.7 9.8 9.8 9.9 9.9 1. 1. 1.1 1. 1. 1.2 1.3 1.3 1.4 1.4 1. 1. 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 11. 11. 11.1 11. 11. 11.2 11.3 11.3 11.4 11.4 11. 11. 11.6 11.6 11.7 11.7 11.8 11.8 11.9 11.9 12. 12. 12.1 12. 12. 12.2 12.3 12.3 12.4 12.4 12. 12. 12.6 12.6 12.7 12.7 12.8 12.8 12.9 12.9 13. 13. 13.1 13. 13. 13.2 13.3 13.3 13.4 13.4 13. 13. 13.6 13.6 13.7 13.7 13.8 13.8 13.9 13.9 14. 14. 14.1 14. 14. 14.2 14.3 14.3 14.4 14.4 14. 14. 14.6 14.6 14.7 14.7 14.8 14.8 14.9 14.9...1...2.3.3.4.4...6.6.7.7.8.8.9.9 16. 16. 16.1 16. 16. 16.2 16.3 16.3 16.4 16.4 16. 16. 16.6 16.6 16.7 16.7 16.8 16.8 16.9 16.9 17. 17. 17.1 17. 17. 17.2 17.3 17.3 17.4 17.4 17. 17. 17.6 17.6 17.7 17.7 17.8 17.8 17.9 17.9 18. 18. 18.1 18. 18. 18.2 18.3 18.3 18.4 18.4 18. 18. 18.6 18.6 18.7 18.7 18.8 18.8 18.9 18.9 19. 19. 19.1 19. 19. 19.2 19.3 19.3 19.4 19.4 19. 19. 19.6 19.6 19.7 19.7 19.8 19.8 19.9 19.9...1...2.3.3.4.4...6.6.7.7.8.8.9.9 21. 21. 21.1 21. 21. 21.2 21.3 21.3 21.4 21.4 21. 21. 21.6 21.6 21.7 21.7 21.8 21.8 21.9 21.9 22. 22. 22.1 22. 22. 22.2 22.3 22.3 22.4 22.4 22. 22. 22.6 22.6 22.7 22.7 22.8 22.8 22.9 22.9 23. 23. 23.1 23. 23. 23.2 23.3 23.3 23.4 23.4 23. 23. 23.6 23.6 23.7 23.7 23.8 23.8 23.9 23.9 24. 24. 24.1 24. 24. 24.2 24.3 24.3 24.4 24.4 24. 24. 24.6 24.6 24.7 24.7 24.8 24.8 24.9 24.9 2. 2. 2.1 2. 2. 2.2 2.3 2.3 2.4 2.4 2. 2. 2.6 2.6 2.7 2.7 2.8 2.8 2.9 2.9 26. 26. 26.1 26. 26. 26.2 26.3 26.3 26.4 26.4 26. 26. 26.6 26.6 26.7 26.7 26.8 26.8 26.9 26.9 27. 27. 27.1 27. 27. 27.2 27.3 27.3 27.4 27.4 27. 27. 27.6 27.6 27.7 27.7 27.8 27.8 27.9 27.9 28. 28. 28.1 28. 28. 28.2 28.3 28.3 28.4 28.4 28. 28. 28.6 28.6 28.7 28.7 28.8 28.8 28.9 28.9 29. 29. 29.1 29. 29. 29.2 29.3 29.3 29.4 29.4 29. 29. 29.6 29.6 29.7 29.7 29.8 29.8 29.9 29.9 3. 3. 3.1 3. 3. 3.2 3.3 3.3 3.4 3.4 3. 3. 3.6 3.6 3.7 3.7 3.8 3.8 3.9 3.9 31. 31. 31.1 31. 31. 31.2 31.3 31.3 31.4 31.4 31. 31. 31.6 31.6 31.7 31.7 31.8 31.8 31.9 31.9 32. 32. 32.1 32. 32. 32.2 32.3 32.3 32.4 32.4 32. 32. 32.6 32.6 32.7 32.7 32.8 32.8 32.9 32.9 33. 33. 33.1 33. 33. 33.2 33.3 33.3 33.4 33.4 33. 33. 33.6 33.6 33.7 33.7 33.8 33.8 33.9 33.9 34. 34. 34.1 34. 34. 34.2 34.3 34.3 34.4 34.4 34. 34. 34.6 34.6 34.7 34.7 34.8 34.8 34.9 34.9 3. 3. 3.1 3. 3. 3.2 3.3 3.3 3.4 3.4 3. 3. 3.6 3.6 3.7 3.7 3.8 3.8 3.9 3.9 36. 36. 36.1 36. 36. 36.2 36.3 36.3 36.4 36.4 36. 36. 36.6 36.6 36.7 36.7 36.8 36.8 36.9 36.9 37. 37. 37.1 37. 37. 37.2 37.3 37.3 37.4 37.4 37. 37. 37.6 37.6 37.7 37.7 37.8 37.8 37.9 37.9 38. 38. 38.1 38. 38. 38.2 38.3 38.3 38.4 38.4 38. 38. 38.6 38.6 38.7 38.7 38.8 38.8 38.9 38.9 39. 39. 39.1 39. 39. 39.2 39.3 39.3 39.4 39.4 39. 39. 39.6 39.6 39.7 39.7 39.8 39.8 39.9 39.9 4. RELATIVE FORWARD REVENUES: S&P GROWTH & VALUE INDEX Rising line indicates that Growth is outperforming Value Figure 9. 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17.6.7.8.9 1. 1.1 1.2.6.7.8.9 1. 1.1 1.2 RELATIVE FORWARD EARNINGS: S&P GROWTH & VALUE INDEX Rising line indicates that Growth is outperforming Value Figure 1. Growth/Value Relative Forward Revenues & Earnings Page / September 17, 16 / Investment Style Guide www.

4 42 4 37 3 32 3 27 Figure 11. Market Cap: S&P Earnings & Valuation S&P FORWARD EARNINGS PER SHARE (weekly, Jan 1999=1) Forward Earnings* S&P LargeCap (2.8) S&P 4 MidCap (49.7) S&P 6 SmallCap (47.1) 4 42 4 37 3 32 3 27 2 22 17 12 1 7 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 9/8 2 22 17 12 1 7 * 2-week forward consensus expected operating earnings per share. Time-weighted average of the current year s and next year s consensus forecast. 28 26 24 Figure 12. P/E RATIOS FOR S&P INDEXES* (weekly) S&P LargeCap (16.) S&P 4 MidCap (17.4) S&P 6 SmallCap (18.1) 28 26 24 22 22 18 18 16 16 14 14 12 12 1 8 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 1 8 * Price divided by 2-week forward consensus expected operating earnings per share. Page 6 / September 17, 16 / Investment Style Guide www.

Market Cap: S&P, 4, 6 2 19 Figure 13. S&P INDEXES (weekly) S&P LargeCap (2139.2) S&P 4 MidCap (21.) S&P 6 SmallCap (74.) 9/16 2 19 16 16 13 13 1 1 7 7 4 4 1 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Standard & Poor s Corporation and Haver Analytics. 1 1 7 Figure 14. S&P INDEXES (weekly, yearly percent change) S&P LargeCap (9.3) S&P 4 MidCap (7.6) S&P 6 SmallCap (1.3) 1 7 2 2 9/16-2 -2-6 7 8 9 1 11 12 13 14 16 17 Source: Standard & Poor s Corporation and Haver Analytics. - Page 7 / September 17, 16 / Investment Style Guide www.

1 8 6 4 - -4-6 4 3 1-1 - -3-4 1 8 6 4 - -4-6 6 4 3 1-1 - -3-4 - Figure. S&P LARGECAP vs. S&P 4 MIDCAP (weekly, yearly percent change) S&P LargeCap (9.3) S&P 4 MidCap (7.6) 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 S&P vs. S&P 4 SPREAD (yearly percent change, basis points) 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 S&P LARGECAP vs. S&P 6 SMALLCAP (yearly percent change) S&P Outperforms 4 S&P Underperforms 4 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 S&P vs. S&P 6 SPREAD (yearly percent change, basis points) Market Cap: S&P, 4, 6 S&P Outperforms 6 S&P Underperforms 6 S&P LargeCap (9.3) S&P 6 SmallCap (1.3) 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 9/16 9/16 9/16 9/16 1 8 6 4 - -4-6 4 3 1-1 - -3-4 1 8 6 4 - -4-6 6 4 3 1-1 - -3-4 - Source: Standard & Poor s Corporation and Haver Analytics. Page 8 / September 17, 16 / Investment Style Guide www.

16 13 11 8 6 Figure 16. RUSSELL 1 vs. RUSSELL (weekly, ratio scale) Market Cap: Russell 1 vs. 16 13 11 8 6 3 3 Russell 1 LargeCap (1179.8) Russell SmallCap (1219.2) 1 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 1 1 8 6 4 - -4-6 RUSSELL 1 vs. RUSSELL (yearly percent change) Russell 1 LargeCap (7.8) Russell SmallCap (.3) 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 1 8 6 4 - -4-6 4 3 1-1 - -3-4 - RUSSELL 1 vs. RUSSELL SPREAD (yearly percent change, basis points) Russell 1 Outperforms Russell 1 Underperforms 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 4 3 1-1 - -3-4 - Source: Frank Russell Company and Haver Analytics. Page 9 / September 17, 16 / Investment Style Guide www.

6 Figure 17. Growth vs. Value: Revenue Squiggles S&P CITIGROUP GROWTH REVENUES PER SHARE (analysts average forecasts, ratio scale) Consensus Forecasts Annual estimates Forward revenues* 17 6 16 4 4 4 4 3 3 3 4 6 7 8 9 1 11 12 13 14 16 17 3 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. 8 Figure 18. S&P CITIGROUP VALUE REVENUES PER SHARE (analysts average forecasts, ratio scale) 8 7 7 Consensus Forecasts Annual estimates Forward revenues* 17 7 7 6 16 6 6 6 4 6 7 8 9 1 11 12 13 14 16 17 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. Page 1 / September 17, 16 / Investment Style Guide www.

8 7 Figure 19. Growth vs. Value: Earnings Squiggles S&P CITIGROUP GROWTH INDEX OPERATING EPS (analysts average forecasts, ratio scale) 8 7 6 Consensus Forecasts Annual estimates Forward earnings* 17 16 6 4 4 3 3 2 2 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. 82 72 Figure. S&P CITIGROUP VALUE INDEX OPERATING EPS (analysts average forecasts, ratio scale) 82 72 62 2 Consensus Forecasts Annual estimates Forward earnings* 17 16 62 2 42 42 32 32 22 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 22 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. Page 11 / September 17, 16 / Investment Style Guide www.

16 14 Growth vs. Value: Profit Margins Figure 21. S&P CITIGROUP GROWTH PROJECTED PROFIT MARGIN (using analysts average earnings and revenues forecasts) Consensus Forecasts Annual estimates Forward profit margin* (9.8) 17 16 14 13 16 13 12 12 11 11 1 1 9 9 8 4 6 7 8 9 1 11 12 13 14 16 17 8 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. 11 Figure 22. S&P CITIGROUP VALUE PROJECTED PROFIT MARGIN (using analysts average earnings and revenues forecasts) 11 1 9 Consensus Forecasts Annual estimates Forward profit margin* (8.6) 17 16 1 9 8 8 7 7 6 6 4 6 7 8 9 1 11 12 13 14 16 17 * Time-weighted average of the consensus estimates for current and next year. Monthly through December, weekly thereafter. Page 12 / September 17, 16 / Investment Style Guide www.

4 3 1-1 - 2 Figure 23. Growth vs. Value: Earnings Growth S&P CITIGROUP GROWTH vs. VALUE STEG* Growth (11.) Value (12.3) 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 LTEG* Growth (13.) Value (1.8) 4 3 1-1 - 2 1 1 3 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 3 1 1-1 - 4 3 1 Growth STEG* (11.) LTEG* (13.) 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Value STEG* (12.3) LTEG* (1.8) -1-4 3 1-1 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 * STEG: 12-month forward consensus expected earnings growth. LTEG: -year forward consensus expected earnings growth. -1 Page 13 / September 17, 16 / Investment Style Guide www.

4 Figure 24. Growth vs. Value: S&P Valuation FORWARD P/E RATIOS FOR S&P CITIGROUP GROWTH vs. VALUE* 4 4 4 3 3 Growth (16.) Value (13.9) 3 3 2 2 1 1 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. 3. Figure 2. RELATIVE P/E: S&P GROWTH & VALUE* (Growth P/E relative to Value P/E) 3. 2. 2. 2. 2. 1. 1. 1. 1.. 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17. * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. Page 14 / September 17, 16 / Investment Style Guide www.

2.8 2.6 2.4 2.2 Growth vs. Value: S&P Valuation Figure 26. PEG RATIOS FOR S&P CITIGROUP GROWTH vs. VALUE* Growth (1.23) Value (1.3) 2.8 2.6 2.4 2.2 2. 2. 1.8 1.8 1.6 1.4 1.6 1.4 1.2 1.2 1. 1..8.6 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17.8.6 * Using -year forward consensus expected earnings growth and price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. 2. 1.7 Figure 27. RELATIVE PEG: S&P GROWTH & VALUE* (Growth PEG relative to Value PEG) 2. 1.7 1. 1. 1.2 1.2 1. 1..7.7...2 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17.2 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. Page / September 17, 16 / Investment Style Guide www.

6 Figure 28. Growth vs. Value: Market Cap Shares S&P CITIGROUP GROWTH INDEX (percent) 6 4 4 4 4 3 3 Capitalization Share (.1) Earnings Share* (46.7) 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 3 3 * Using consensus 12-month forward earnings forecasts. 8 Figure 29. S&P CITIGROUP VALUE INDEX (percent) 8 7 7 6 6 4 3 Capitalization Share (49.8) Earnings Share* (3.3) 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 4 3 * Using consensus 12-month forward earnings forecasts. Page 16 / September 17, 16 / Investment Style Guide www.

Figure 3. Growth vs. Value: Net Earnings Revisions S&P CITIGROUP GROWTH INDEX NET EARNINGS REVISIONS* 1 1 Aug -1-1 - - -3-3 -4 - NERI Jun.9 Jul.6 Aug 1. 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17-4 - * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Figure 31. S&P CITIGROUP VALUE INDEX NET EARNINGS REVISIONS* 1 1 Aug -1-1 - - -3-3 -4 - NERI Jun 2.3 Jul 1.3 Aug 2. 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17-4 - * Three-month moving average of the number of forward earnings estimates up less number of estimates down, expressed as a percentage of the total number of forward earnings estimates. Page 17 / September 17, 16 / Investment Style Guide www.

Russell Large, Small, Growth, Value 2 22 17 Figure 32. GROWTH vs. VALUE (weekly, 1998=1) Russell 1 LargeCap Growth Value 2 22 17 12 12 1 1 7 7 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Frank Russell Company and Haver Analytics. 3 27 Figure 33. GROWTH vs. VALUE (weekly, 1998=1) 3 27 2 Russell SmallCap 2 22 Growth Value 22 17 17 12 12 1 1 7 7 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Frank Russell Company and Haver Analytics. Page 18 / September 17, 16 / Investment Style Guide www.

3 27 Figure 34. Russell Large, Small, Growth, Value RUSSELL STOCK PRICE INDEXES: LARGECAP vs. SMALLCAP GROWTH (weekly, 1998=1) 3 27 2 2 22 Russell 1 LargeCap Growth Russell SmallCap Growth 22 17 17 12 12 1 1 7 7 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Frank Russell Company and Haver Analytics. 3 27 Figure 3. RUSSELL STOCK PRICE INDEXES: LARGECAP vs. SMALLCAP VALUE (weekly, 1998=1) 3 27 2 22 Russell 1 LargeCap Value Russell SmallCap Value 2 22 17 17 12 12 1 1 7 7 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Frank Russell Company and Haver Analytics. Page 19 / September 17, 16 / Investment Style Guide www.

Russell Large, Small, Growth, Value 8 6 4 Figure 36. LARGECAP GROWTH vs. VALUE (weekly, yearly percent change) Russell 1 LargeCap Growth (8.7) Value (11.8) 8 6 4 - -4-6 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 - -4-6 1 8 6 SMALLCAP GROWTH vs. VALUE Russell SmallCap Growth (3.3) Value (12.9) 1 8 6 4 4 - -4-6 1 8 6 4 - -4-6 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 LARGECAP vs. SMALLCAP GROWTH Russell 1 LargeCap Growth (8.7) Russell SmallCap Growth (3.3) 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 - -4-6 1 8 6 4 - -4-6 1 8 6 LARGECAP vs. SMALLCAP VALUE Russell 1 LargeCap Value (11.8) 1 8 6 4 4 - -4-6 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Frank Russell Company and Haver Analytics. Russell SmallCap Value (12.9) - -4-6 Page / September 17, 16 / Investment Style Guide www.

4 3 1-1 - -3-4 - 1 8 6 4 - -4-6 -8 8 6 4 - -4-6 4 3 1-1 - -3-4 Figure 37. Russell Large, Small, Growth, Value LARGE CAP GROWTH vs. VALUE SPREAD (yearly percent, basis points) Large Growth > Large Value Large Growth < Large Value 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 SMALL CAP GROWTH vs. VALUE Small Growth > Small Value Small Growth < Small Value 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 LARGE CAP vs. SMALL CAP GROWTH Large Growth > Small Growth Large Growth < Small Growth 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 LARGE CAP vs. SMALL CAP VALUE 1994 199 1996 1997 1998 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 Source: Frank Russell Company and Haver Analytics. Large Value > Small Value Large Value < Small Value 4 3 1-1 - -3-4 - 1 8 6 4 - -4-6 -8 8 6 4 - -4-6 4 3 1-1 - -3-4 Page 21 / September 17, 16 / Investment Style Guide www.

3 3 Figure 38. Russell Valuation SmallCap, Growth, Value FORWARD P/E RATIOS FOR RUSSELL * (weekly) Russell (22.4) Russell Growth (2.8) Russell Value (19.) 3 3 2 2 1 3 4 6 7 8 9 1 11 12 13 14 16 17 1 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. 3 3 Figure 39. FORWARD P/E RATIOS FOR US SMALLCAP * P/E capped at 3 due to extreme values. Russell (22.4) S&P 6 SmallCap (18.1) 3 3 2 2 1 1999 1 2 3 4 6 7 8 9 1 11 12 13 14 16 17 1 * Price divided by 12-month (2-week) forward consensus expected operating earnings per share. Monthly data through December, weekly thereafter. Page 22 / September 17, 16 / Investment Style Guide www.

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