Understandable investing for everyone! This is the slogan of Indigo, a Czech platform that wants to make investing easier for regular people. But can people who aren’t rich also make money? Let’s find out how Indigo works, how much it costs, and how it can value things.
Indigo review at a glance
The Czech company Patria Finance offers a service called Indigo that lets you invest in stocks, commodities, and bonds.
Investing through Indigo is so easy and straightforward that even someone who has never done it before can understand it. Just fill out the form and put the money in the account. Indigo will take care of everything else.
Indigo will put together a portfolio of stock or bond ETF funds for you based on the answers you give to their investment questionnaires. During the process of investing, Indigo will look at the portfolio and, if necessary, change it. For these services, you will pay a management fee of 1% per year. On the other hand, there are no fees to enter, leave, or perform.
You can put as little as 100 crowns into the portfolio, which is great for people who want to invest small amounts regularly, like 500 crowns every month.
Indigo has a total of four basic portfolios, and each one has a different level of risk. The portfolio with the least risk should earn about 2.5% per year, while the portfolio with the most risk could earn up to 8% per year.
Advantages:
- Clear investment platform
- Mobile and web application
- Simple, fast, online
- Transparent fees
- Regular portfolio rebalancing
Disadvantages:
- The composition of the portfolio cannot be changed
- Currency risk (investment in EUR and USD)
Basic information about Indigo
Indigo, operated by Patria Finance in Prague and founded in 2019, is a Czech investment platform licensed by CNB with 7 portfolios composed of ETFs (bonds, stocks, commodities) and cash, processed with portfolio rebalancing once a month, and expected appreciation ranging from approximately 2.5% to 8% per year, available in CZK currency without hedging against currency risk (investments made in EUR or USD), with a minimal investment of 100 CZK, accepting bank transfers and payment cards, charging an administration fee of 1% per year (comparable to competition), and no additional charges.
How does Indigo (Patria) work?
Indigo works like a traditional investment platform. Investors put money in, and an algorithm on Indigo decides how to invest it.
Indigo mostly invests in exchange-traded funds (ETFs) that focus on stocks, bonds, or commodities.
What are ETFs? ETF stands for an investment fund that can be bought and sold on a stock exchange. Each ETF is made up of tens to hundreds of securities from a certain market segment, such as US stocks. This makes sure that the portfolio is well diversified. ETFs are cheaper and easier to buy and sell than mutual funds, but they work pretty much the same way.
The risk level and expected growth depend on how the portfolio is put together. In general, stocks make more money than bonds, but they also carry more risk.
INVESTMENT PORTFOLIOS
Based on your answers to the first questionnaires, a portfolio of investments will be made for you. It tells Indigo how long you want to invest, how much you want to invest, what your investment goal is, and how you feel about risk.
Indigo has four basic portfolios that have different levels of risk. ETF funds that focus on stocks or bonds make up each portfolio.
Not only does the composition of a portfolio change based on the level of risk, but it also changes based on the investment goal you choose in the questionnaire. This is especially clear when investing in Na dchod, since the portfolio also has commodity ETFs.
Part of the portfolio stays in cash, from which fees are regularly taken out. Also, if the markets are very unstable, the algorithm can sell some of the property it has invested in and keep the money in the account.
After logging in, you can go to the section Portfolio to find out exactly how your portfolio is set up, including a list of each ETF fund.
PORTFOLIO REBALANCING
It is clear that the mix of stocks and bonds in a portfolio changes over time. Some ETFs will go up and some will go down. In turn, this changes the expected return and the overall risk.
Automatic balancing (rebalancing) happens every so often to keep the original distribution of the portfolio the same.
Rebalancing is easy to understand: the part of the portfolio that is going down is bought back, and part of the part that is going up is sold. The end result will be a portfolio with the same amount of each type of investment as at the start.
Every day, the Indigo algorithm looks at how the portfolio is put together and, if necessary, changes it. So, some of the money will be moved from stocks to bonds if the portfolio gets too risky. If it is too cautious, on the other hand, bonds will be bought instead of stocks.
Instructions: How does investing through Indigo work?
INSTRUCTIONS FROM REGISTRATION TO WITHDRAWAL OF PROFITS
- Check out the site indigo.patria.cz.
- Fill out a short questionnaire, and Indigo will make a custom portfolio for you based on the answers you give. In the questionnaire, you will say why you are investing, how much risk you are willing to take, how much you plan to invest, and for how long.
- Find out about the plan for investing that Indigo will make for you after you fill out the questionnaire. In the plan, you can see how much your investments are expected to grow, how they will be put together, and how much you will pay in fees over the whole period.
- Sign up for an account. Below, you can read about how people sign up and how they are then checked.
- Money needs to be put into the account. You can use a bank transfer or a credit card to make a deposit. You can find instructions in the section Investor.
- Keep track of where your investments stand. In the Indigo application, you can see both how the portfolio is put together and how it is doing so far. You can add more money to the portfolio whenever you want, either once or often.
- Take money out of Indigo and put it in your bank account. The request to choose can be found in the section called “Vybrat.” But keep in mind that selling securities takes between 3 and 6 days. Then Indigo will be able to send you the money.
- If you use the link in this review to create an account, Indigo won’t charge you any fees for the first 90 days. The offer is only good for new customers and is good until further notice.
Expected returns
First of all, we need to stress that Indigo doesn’t tell you how much money you can expect to make. For each portfolio, only the expected growth of the investment in case the market goes up or down is shown.
Based on how the given portfolio has done in the past, the expected growth can be predicted. Indigo only works for a short amount of time, but this is not too much of a problem because the performance of the portfolios can be calculated backward.
So what can you expect in return?
The expected rate of growth is between 2.5% and 8% per year. The exact value depends on the amount of risk and how the portfolio is put together.
A conservative portfolio with a historical yield of about 2.5% has the lowest yield. This return won’t be enough to keep up with inflation, but it should be stable and not very risky. On the other end of the spectrum, a risky portfolio with an expected return of around 8% per year comes with higher risk and more volatility.
But don’t put too much stock in any number. One of the most important lessons about investing is that the past is no guarantee of the future.
ISN’T IT BETTER TO INVEST SEPARATELY?
Investment platforms like Indigo have one clear benefit: they let almost anyone invest, no matter how much money they have or how much experience they have. Just fill out the questionnaire and put the money in the bank. The rest will be taken care of for you.
But it also has some bad things about it:
Even if your portfolio isn’t doing well, you will always have to pay the fees.
You can’t change the portfolio in any way.
There are ETFs that have done better than Indigo in the past.
So, the question is whether it wouldn’t be better to invest in ETF funds on their own.
Some index ETFs earn an average of about 10% a year, which is better than Indigo’s best portfolio.
In the case of Indigo, the annual fee is only 1%, which isn’t too high. But if you invest for a long time, even a one percent fee makes a big difference. It keeps you from getting interested in profits that would have made you more money.
Whether you buy ETFs directly or through Indigo
You can invest in ETFs directly and for free through the XTB broker, for example.
But remember that investing on your own will take you more time and cost you more money. So, if you don’t want to invest actively, you should stick with investment platforms.
Fees at Indigo
Indigo’s strength is that its fees are low and easy to understand. The platform only has one fee, so investors know right away how much they will have to pay. Compare this to mutual funds, where you can pay up to four different kinds of fees (entry, exit, management, and performance). That’s kind of hard to understand, don’t you think?
When you use Indigo’s services, you pay an annual fee of 1% of the amount you have invested. Here is where you can find the current list of fees.
Now, let’s look at each fee in more depth:
- Fees for joining and leaving: Indigo does not charge fees for making deposits or taking money out.
Performance Fee: Indigo does not charge a performance fee. - Management fee: The fee is 1% of the amount invested each year. The fee is made up of commissions (0.88%) and costs for keeping securities (0.12%).
- The fee is always charged, so each month you pay 0.083% of the average value of your portfolio.
If you start investing in the middle of the year, you only pay half the fee.
Account registration
It’s easy to sign up for an account, so it shouldn’t take more than 20 minutes. You only need two forms of ID and a cell phone or computer with an internet connection.
The benefit is that you can do everything online, so you don’t have to go anywhere or sign anything.
How does the registration happen?
INSTRUCTIONS STEP-BY-STEP REGISTRATION
- On the official Indigo.cz site, click on the button. Vytvořit účet
If you use the link in this review to create an account, Indigo won’t charge you any fees for the first 90 days. The offer is only good for new customers and is good until further notice. - Fill out the form to sign up (name, surname, email, and phone).
Check the contact info. Indigo will first send you a text message with a code and then an email with a link to verify your account. - Verification of identity comes next. To do this, you’ll need to get two forms of ID (like an ID card, a passport, or a driver’s license) that you’ll upload to your account.
- European rules and guidelines say that clients must be checked (AML, KYC). Their goal is to stop people from laundering money and doing other illegal things.
- Fill out the questionnaire about your income.
- Now comes the first bank transfer payment for verification.
- Signing the contract is the last step in the registration process. When you click on the button SOUHLASM SE SMLOUVOU, you are signing electronically.
Deposits and withdrawals
Bank transfers are used to deposit money. You can also pay with a credit card, but the first payment (for verification) must be made with a classic transfer.
The currency used for deposits and withdrawals is the crown, but the investments are made in foreign currency. Indigo buys an ETF that is priced in euros or US dollars, so investors need to think about the risk of currency fluctuations.
INVESTMENT FROM A HUNDRED
With Indigo, you can invest once or regularly, and the least you can invest in either case is 100 crowns.
When you invest regularly, you don’t have to worry about when to buy, so you don’t buy at the top. You can change the amount you invest whenever you want, and it doesn’t matter if you don’t put anything in for a few months. You are the only one who can decide how much to put in and how often.
Experience with Indigo
Indigo is a project of Patria Finance, a Czech company that has been in the finance business since 1994. It also runs the news website Patria.cz and the brokerage firm Patria Finance (formerly Patria Direct).
Since this is a Czech project, you will pay in Czech crowns and talk to the customer line in Czech. You can reach support by phone or email from 9 a.m. to 5 p.m., Monday through Friday.
Internet reviews say that Indigo is a good project with a good offer. But you will also find negative comments in which clients say things like the returns aren’t as good as what the competition offers. But we should note that competitors’ portfolios are different, so the lower returns may be due to a more conservative strategy.
WHAT TO WATCH OUT FOR?
- You are taking a risk with money. The investments are made in euros or dollars, but deposits and withdrawals are done in crowns.
- You won’t make hundreds of percent a year from Indigo. But it has a much better chance of making money than savings accounts and term deposits.
- ETFs are good for investments that will last at least 5 years or more. A longer time frame for an investment lowers the risk of bad timing and, at the same time, makes the investment more valuable.
- The returns that are reported do not take inflation or taxes into account.
Final summary
The goal of the Indigo project is to reach people who don’t have the time or don’t understand how to invest. He is doing well according to the numbers.
At the moment, more than 5,000 people use the platform. By 2024, Indigo wants to have twice as many users. Official sources say that the average size of the portfolio is 35,000 CZK. This means that Indigo is in charge of more than 175 million CZK.
Beginners and occasional investors who don’t want to actively invest and would rather pay more for ease will like the platform the most.
On the other hand, if you plan to invest for a long time, every percentage point you lose will show up in the compound interest. Even a small fee can cut profits by tens of thousands of crowns in the long run. So, if you buy the ETF on its own, you can make more money. It will take more work, though.
You may also like, FONDEE Review 2023: Investment experience at Fondee.cz, strategy, fees, returns, discussion
The views and opinions expressed in these articles are those of the source ForexIndustry.com and do not necessarily reflect the official position of ‘xBTCh,’ which shall not be held liable for any inaccuracies presented. The information provided within this article is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability of the information in this article for any purpose.
This article is syndicated automatically through a third-party agency from ForexIndustry.com.
To view the original article at ForexIndustry.com, you can visit https://www.forexindustry.com/2023/03/16/indigo-patria-review-2023/.
