The Raiffeisen Portfolio: A Familiar Swiss Pattern

The case that sparked recent discussion follows a classic Swiss pattern. A bank customer approaches their house bank, Raiffeisen in this instance, with clear preferences: keep it Swiss, keep it local, and keep it managed by professionals. The resulting portfolio checks all the traditional boxes: Swiss equities, Swiss bonds, a sprinkling of international exposure, and that reassuring Raiffeisen brand name stamped across the top.

But beneath the polished surface, experienced investors see red flags. The portfolio leans heavily on actively managed funds, carries a CHF 250 annual fee, and exhibits what finance professors call “home bias”, the tendency to overweight domestic assets beyond what market capitalization would justify.

Many seasoned investors wonder whether this represents genuine financial planning or simply a well-packaged product designed to generate fee income. The skepticism isn’t unfounded. When one analyst questioned whether CHF 250 truly covers all costs, the underlying concern was clear: banks don’t print glossy eight-page reports for free.

Switzerland’s Defensive Charm Offensive

The Swiss market’s 2025 performance gives banks like Raiffeisen plenty of ammunition to defend their domestic focus. The SMI gained around 12 percent, while the broader SPI rose approximately 15 percent, solid numbers that look even better when global uncertainty spikes.

Matthias Geissbühler, CIO of Raiffeisen Switzerland, noted that Swiss equities performed well internationally in 2025. The market’s defensive characteristics, roughly 60 percent of Swiss stocks come from defensive sectors like healthcare and food, make them attractive during turbulent times.

This defensiveness is Switzerland’s financial brand. When geopolitical tensions rise, money flows into Swiss francs and Swiss companies. It’s a pattern that has held for decades, reinforcing the belief that local assets offer both stability and reasonable returns.

But here’s where the narrative frays at the edges. That 12 percent SMI gain? It comes with caveats. The index’s concentration risk, dominated by a handful of mega-caps like Roche, Nestlé, and Novartis, means performance hinges on few names. And when the Swiss franc strengthens, as it did in 2025, returns for domestic investors holding foreign assets get compressed.

The Fee Structure: A Closer Look at CHF 250

Let’s examine that CHF 250 annual fee. On a modest portfolio of CHF 50,000, that’s 0.5 percent annually, seemingly reasonable. But portfolio management fees rarely tell the full story. The actively managed funds within the portfolio carry their own expense ratios, often 0.8 to 1.5 percent. Transaction costs, bid-ask spreads, and currency conversion fees nibble away at returns.

Critics argue this fee structure primarily serves the bank. One commenter drew an analogy to hiring a cleaner: paying for service is fine, but not when the cleaner takes 10 percent of your income. The point stings because it reframes the relationship. Are you paying for expertise, or for the convenience of not managing investments yourself?

The counterargument, that bonds require active management to avoid obvious pitfalls, holds some truth. But in an era of ultra-low Swiss interest rates, the real question is why hold so many Swiss bonds in the first place? The answer often circles back to home bias and regulatory comfort, not optimization.

Global Diversification: The Math Doesn’t Lie

The numbers from 2025 paint a telling picture. While Swiss markets performed solidly, South Korea’s Kospi surged 76 percent. The German DAX gained 23 percent. Even the S&P 500, despite dollar weakness, delivered strong returns.

For Swiss investors, currency effects matter enormously. The dollar’s double-digit decline against the franc meant that while the S&P 500 rose in dollar terms, Swiss investors saw muted gains after conversion. This cuts both ways: it boosted Swiss asset returns in franc terms, but it also highlights the risk of concentrating in a single currency zone.

The home bias debate isn’t theoretical. Academic research consistently shows that optimal portfolios should weight assets by global market capitalization, giving Swiss assets perhaps 2-3 percent, not the 30-50 percent many domestic portfolios hold. The gap represents uncompensated risk, exposure to a single country’s economic cycles, regulatory changes, and currency fluctuations.

The Dividend Strategy Alternative

Some Swiss investors are finding middle ground through dividend-focused strategies. The “Dogs of the SLI” approach, adapting the classic Dogs of the Dow to the Swiss Leader Index, targets high-dividend-yielding Swiss stocks that have underperformed.

In 2025, this strategy reportedly beat the SLI, albeit narrowly. For 2026, the strategy shifts, with Partners Group, Helvetia Baloise, and SGS replacing Novartis, Roche, and Adecco. The average dividend yield hovers around 4.1 percent, attractive in a low-rate environment.

This approach retains Swiss exposure but adds discipline. It forces investors to buy what’s cheap, not what’s familiar. Yet even proponents acknowledge limitations: concentration risk remains, and the strategy works best as a satellite holding, not a core portfolio.

The Bigger Picture: Banks vs. Clients

The Raiffeisen debate reflects a broader tension in Swiss finance. Banks operate under increasing margin pressure. Passive investing and digital platforms erode traditional revenue streams. The natural response: emphasize the value of active management, local expertise, and personalized service.

But this creates misaligned incentives. A portfolio that generates more fees isn’t necessarily a better portfolio. When account managers offer to “customize” recommendations, they’re often asking clients to validate a pre-built template rather than starting from first principles.

The most telling critique? Many investors could replicate these portfolios themselves using low-cost ETFs for a fraction of the fee. The bank’s value proposition rests increasingly on behavioral coaching, preventing panic selling, rather than superior security selection.

What Should Swiss Investors Actually Do?

For the 60-year-old in our case study, the answer depends on priorities. If peace of mind and local relationships matter most, and if the CHF 250 fee represents true all-in costs, the Raiffeisen portfolio isn’t catastrophic. It’s diversified, professionally rebalanced, and aligned with Swiss regulatory standards.

But if optimization is the goal, the path is clear: build a global portfolio using low-cost index funds, limit Swiss exposure to market weights, and keep bond allocations modest given negative real yields. The 10-year horizon allows for equity-heavy positioning, and currency hedging can manage franc strength.

The uncomfortable truth? Swiss banks excel at many things, but building unbiased, cost-efficient portfolios isn’t always one of them. Their recommendations reflect Swiss culture: conservative, relationship-driven, and profitable for the provider.

Investors must decide whether that CHF 250 buys expertise, or just a very expensive placebo.

Bottom line

Switzerland’s domestic market offers stability, but at a cost. Whether that cost is justified depends less on the portfolio’s contents and more on whether you believe your bank’s interests align perfectly with yours. The Raiffeisen debate isn’t about one portfolio, it’s about whether Swiss investors can afford to stay home in an increasingly global world.