With concerns over a US-led economic slowdown worldwide and the lingering effects of the credit crisis on financial markets, the importance of asset allocation has been reinforced.

Citi Private Bank has put forward four investment themes that it believes will help shape its high-net-worth clientsÆ portfolios: agricultural commodities, emerging markets, infrastructure and energy, and distressed assets.

Emerging-market industrialisation, accelerating emerging-market inflation, tight inventories, and eroding global planting and harvest areas are putting pressure on agricultural commodity prices, creating opportunities for investors this year onwards, the bank notes.

ôIf you look back at the population 30 years ago, the total size was 4.2 billion people,ö says Nigel Sze, head of investments for Citi Global Wealth Management Asia-Pacific. ôToday it has grown to 6.6 billion, but land dedicated to agriculture has been falling year-by-year.ö

Since 1965 the worldÆs agricultural area per capita has already experienced a 43% decrease, leading to a 63% drop in the level of world grain reserves. Between now and 2050, it will continue to fall by another least 27%, according to Schroders' research.

Sze believes a historically low inventory, paired with robust demand, will be the key drivers of agricultural commodities in 2008.

Emerging markets, which turned into safe havens following the US subprime mortgage crisis, is still a favoured investment theme. These markets, after all, still appear to be relatively immune to the credit-market dislocation in the US and Europe.

Attractive valuations and excess liquidity should be good for shares listed in Latin America and the Middle East, the bank says, while the weak US dollar and robust commodity prices should support Latin America equities.

Political, social and economic advancements in many emerging countries, meanwhile, have fuelled global demand growth that has outpaced infrastructure investment across many different sectors.

AsiaÆs infrastructure needs alone are estimated at $180 billion by end-2010, the bank says, and this need might be highest in India where production capacity is reaching 90% utilisation.

Opportunities exists in construction and building materials while rising energy costs, regulation and pollution control are driving heavy research spending in alternative sources, the bank says.

Strong demand from China and India will ensure that energy will be a consistent growth sector for the years to come, Sze says.

Distressed assets are expected to perform well during this current high-volatility, widening credit-spread environment. Historically, a pick-up in lower quality issuance as a percentage of total new issues in the US credit market, as was the case from 2004 to 2007, precedes an acceleration in credit default rates, the bank says.

Investors can take advantage of the opportunities created by credit dislocation, the bank says, when prices in certain sectors are depressed by forced selling.

Overall, Citi Private Bank is overweight in equities û which it expects to continue to outperform as an asset class in 2008 û and underweight in bonds. Within equities, the bank expects stockmarkets in Europe and large-cap companies in the US to fare better.

Citi Private Bank delivers wealth management services to clients with a net worth in excess of $10 million. Citi Smith Barney offers a range of financial planning and investment services for high-net-worth and mass affluent clients with a net worth of at least $1 million.