15.05.2026
According to a Norstat survey commissioned by LHV, a large proportion of the people in Estonia prefer lower risk to potentially higher returns when investing.
The survey revealed that 46% of Estonian residents prefer lower risk when investing, while only 17% prefer potentially higher returns. At the same time, a significant portion of respondents (37%) were unable to say what they consider most important when growing their money.
The largest proportion (53%) of those who prefer lower-risk options is found among 18- to 29-year-olds. In contrast, the proportion of those who prefer potentially higher returns is highest among 30- to 39-year-olds (25%). All age groups prefer lower risk over potentially higher returns.
According to Vahur Vallistu, Chairman of the Management Board of LHV Varahaldus, the survey results confirm the trend that people are becoming increasingly deliberate in assessing their true risk appetite when making investment decisions. ‘Until recently, there was almost no discussion of investment-related risks. Portfolios grew rapidly, and the markets enjoyed several consecutive years of exuberant growth. Yet foreign policy and economic turbulence have sent investors on a roller coaster ride today. Since neither markets nor people like uncertainty, there is increasing talk of risks once again,’ Vallistu said. More specifically, in the context of pension pillars, he believes it is important for the Estonian people that the risks associated with the money they have saved for their future are managed, the money is kept safe, and it is grown skilfully. The more volatile the surrounding environment, the more the thought pattern moves in that order.
For most people in Estonia, the second pillar is one of the most important safeguards supporting a dignified retirement, with many options being available on the Estonian pension fund market. Vallistu emphasised, however, that saving for retirement takes decades; therefore, when choosing between the second and third pillars, one should focus primarily on the funds’ long-term returns, not just on fees or short-term growth spurts. It is also important to familiarise yourself thoroughly with the content of the various funds to find the solution that best suits your risk appetite.
For example, in LHV’s actively managed pension funds, the risks of significant fluctuations in the value of the assets accumulated in the portfolio are generally lower, because investments are diversified across different asset classes; in addition to stock markets, investments are made in both real estate and private companies, and fund managers constantly monitor positions and make adjustments based on market conditions. ‘The economy is cyclical, and historical experience and international practice show that investing in different asset classes supports its more effective protection against market downturns,’ Vallistu noted. This is primarily because different asset classes often react to macroeconomic changes in different ways.
In contrast, index funds rise and fall in tandem with the stock market, as the process is fully automated. While this reduces costs, it also leaves the customer without meaningful risk management. ‘Figuratively speaking, the investor decides to take their hands off the wheel and simply hope that the tyres hold and the road ahead remains fairly straight,’ Vallistu explained.
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