Credit Suisse has launched investable indices which are designed to reflect shifting appetite for risky and low-risk assets. One of the first of the products, the Risk Appetite Investable Index, offers investors exposure to European equities and government bonds. The product is un-leveraged, long-only and uses tracker portfolios to gain exposure to the equity and bond markets. The core concept of the RAII Index is to adopt disciplined rules that add risk when investors are most fearful and reduce risk when investors are feeling unusually optimistic, thereby countering the tendency for investors to become unduly fearful or euphoric at different stages of market cycles. The investment objective of the European RAII is to significantly outperform a classic 50:50 balanced portfolio of equities and bonds, both in absolute and risk adjusted terms. "Experience confirms the basic intuition that extremes in investor confidence and risk appetite are strongly correlated across asset classes and fluctuations in sentiment can be captured by changes in the relative performance of safe assets like government bonds versus volatile assets like equities,” said the Swiss bank.