Raiffeisen Rio: Is it safe to invest

Raiffeisen Rio 2024: Advantages and disadvantages

Raiffeisen Rio is a digital advisory service provided by Raiffeisen. It was launched in 2020, so it's one of the youngest members of the Swiss digital advisory family. It's important to note that Rio is only available to Raiffeisen clients. To use Rio, you need to have an electronic bank account with Raiffeisen. This also means that if you want to use Rio without having a Raiffeisen bank account, you will have to pay an additional fee for both the bank account and the Rio service.

How to invest

First, the service will ask you to choose one of four investment strategies. You will be able to answer a few simple questions - they will help you determine your attitude to risk. Then you will receive recommendations regarding the investment strategy. You don't have to follow them, but you can choose only from these four:

  •  Income-oriented with 25% stocks;
  •  Balanced with 45% stocks;
  •  Growth with 65% stocks;
  •  Equity with 95% of shares.

Raiffeisen refrains from exceeding 95%, while some advisers allow allocations of up to 99%. Nevertheless, a 95% equity investment is already a significant amount for those seeking an aggressive approach. Those funds not allocated to stocks are divided between cash and bonds. You cannot directly select the allocation of the funds: only four basic strategies are available, with no possibility for individual customization.

You can then choose your investment priority from the three available:

  •  Swissness - invest exclusively in Swiss stocks and bonds;
  •  Global - invest worldwide;
  •  Futura - invest only in sustainable companies around the world.

These are very standard priorities that every digital advisor in Switzerland generally has.

In addition, you can choose certain aspects that you would like to focus on more closely:

  •  Robotics;
  •  Green energy;
  •  Cybersports;
  •  Swiss stocks;
  •  And a few others.

Each added "theme" will take up 5% of the total portfolio. So if you add four themes to your portfolio, 80% will be in the core components and 20% in the themes (5% each).

The core components use semi-passive funds. Their peculiarity is that it's hard to know which is the active component. This is not very safe for the investor: such funds are even worse than completely passive funds. They are extremely complex and offer no advantages over index funds. They are also more risky than simple funds.

Among other things, Raiffeisen does not tell which funds it invests in. It is almost impossible to find this information. Precisely because of this lack of transparency, investing in Raiffeisen Rio is not a good idea.

Safety of investments

Online services are quite risky. If you want to invest a lot of money in a digital service, you need to check its security. In the case of Raiffeisen Rio, it is difficult to determine: Raiffeisen does not give detailed information about the products. In general, Raiffeisen is a bank, so we can assume that they use themselves as a custodian bank. Raiffeisen itself has a relatively good reputation. Your money will be protected by the Swiss deposit protection system.

As for your shares, we can assume that Raiffeisen Rio will place them in your name in a Raiffeisen bank. This is generally quite safe. In the event of bankruptcy, your shares still belong to you and must be transferred to another custodian bank. This may take some time, but your shares will be safe.

Structured products, on the other hand, usually don't have this guarantee. They are directly linked to the issuer. And in the case of a structured product, you don't own the underlying stock. If the issuer goes bankrupt, you are likely to lose your entire investment. Overall, it's relatively safe to invest in Raiffeisen Rio as long as you don't invest in "themes". Otherwise, you are increasing your risk as these products are significantly riskier than equities.


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