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III pillar

Investment in the future on which the state refunds the income tax

  • Ensure your future through the third pillar
  • A wise monthly investment
  • The state refunds the income tax on the investment
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View the current state of your pension

Income tax incentive

The state refunds the income tax on the money invested in a third pillar pension fund. The allowance applies to payments that represent up to 15% of your gross income, but not in excess of EUR 6000 per year. For instance, if you invest EUR 100, you will receive an income tax refund of EUR 20 next March.

III pillar funds

LHV Pension Fund Intress Pluss
  • Low risk level.
  • Suitable for risk averse pension savers with little experience in investing in financial markets, with at least 2 years remaining until retirement.
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Strategy
In the selection of the fund’s investments, low risk and preservation of value is preferred over a potential high yield. The fund’s assets are predominantly invested in debt securities and deposits at credit institutions. The fund does not invest in shares or other equity instruments.

Expenses

Entry fee 0% / Exit fee 1% / Management fee 0.95%

Information about the fund

Volume of the fund (as of 30.06.2017)536,392.03 €

Price of a unit

Management companyLHV Varahaldus

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

The data is presented as at 30.06.2017

Biggest investments
Lithuania 05/20224.69%
Bulgaria 09/20244.26%
IBM Corporation 11/20203.98%
Korea (Republic of) 12/20213.35%
Lithuania 02/20233.28%
Romania 10/20253.23%
Elering 07/20183.05%
Apple 11/20222.89%
China Development Bank 01/20222.79%
JP Morgan Chase 08/20212.29%
Current asset allocation
Money and deposits57.5%
Government bonds21.6%
Corporate bonds21.0%
Regional distribution
Money and deposits57.5%
The Baltic states16.4%
Europe (excl. the Baltic states)8.5%
Asia6.1%
North America11.4%
LHV Pension Fund 100 Pluss

Suitable if

  • at least 10 years left until retirement
  • you have high risk tolerance
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Strategy
LHV Pension Fund 100 Plus is a 3rd pillar fund investing up to 100% into the asset class of shares. In order to ensure the liquidity of the fund’s assets or to protect their value, in certain market situations the fund may invest into debt securities and deposits at credit institutions. In a limited scope, the fund also invests into alternative asset classes, as well as immovable property and assets classes related to commodities.

Expenses

Entry fee 0% / Exit fee 1% / Management fee 1.55%

Information about the fund

Volume of the fund (as of 30.06.2017)4,598,334.25 €

Price of a unit

Management companyLHV Varahaldus

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

The data is presented as at 30.06.2017

Biggest investments
EfTEN Kinnisvarafond6.90%
iShares STOXX Europe 600 DE5.68%
iShares MSCI Japan EUR Hedged UCITS ETF4.90%
Allianz 07/20454.46%
iShares STOXX Europe 600 Utilities3.36%
Romania 10/20253.20%
Latvenergo 12/20173.04%
Citadele banka 12/20262.94%
Morgan Stanley 12/20182.46%
JP Morgan Chase 08/20212.35%
Current asset allocation
Money and deposits40.9%
Government bonds4.9%
Corporate bonds19.9%
Real estate6.9%
Shares27.5%
Regional distribution
Money and deposits40.9%
The Baltic states17.5%
Europe (excl. the Baltic states)32.8%
North America8.8%
LHV Supplementary Pension Fund
  • Medium risk level.
  • Suitable for pension savers aware of investment risks, who wish to make long-term investments in a supplementary funded pension, with the aim of using the accumulated money after reaching the age of 55.
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Strategy
The fund makes significant investments in equity markets: to ensure maximum growth, the proportion of equity markets is kept close to 75% of the value of the fund’s assets. The proportion of equity markets may also be higher – up to 95% – or lower (in recent years close to 40%), if considered reasonable by the fund manager.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 1% / Management fee 1%.

Information about the fund

Volume of the fund (as of 30.06.2017)9,330,227.33 €

Price of a unit

Management companyLHV Varahaldus

Depositary where the fund’s assets are heldAS SEB Pank

We will allocate your money into international enterprises, the development of which we believe in. At the same time, it must be taken into consideration that the future of these enterprises depends on both their internal decisions as well as the changes in the global economy.

The data is presented as at 30.06.2017.

Biggest investments
EfTEN Kinnisvarafond5.94%
East Capital Baltic Property Fund II5.58%
Bulgaria 09/20243.74%
Lithuania 11/20242.96%
Olainfarm2.76%
Amber Circle Funding 12/20222.72%
WisdomTree Japan Hedged Equity Fund2.68%
Tallinna Kaubamaja2.60%
Citadele banka 12/20262.58%
Lithuania 02/20232.45%
Current asset allocation
Money and deposits21.1%
Government bonds13.5%
Corporate bonds23.1%
Real estate12.4%
Shares29.9%
Regional distribution
Money and deposits21.1%
The Baltic states44.0%
Europe (excl. the Baltic states)17.2%
Asia6.8%
North America6.8%
Other4.1%

Unlike European stock exchanges, trading on the Baltic stock exchanges was positive

Romet Enok, Portfolio Manager

June was a rather weak month for European equity markets and the stock exchanges of most countries ended in debit. However, the Japanese stock exchange index, measured in the local currency, increased by 1.9%. Both the Tallinn and Vilnius stock exchanges had a good result with a 1.8% and 0.8% increase, respectively. The Riga stock exchange was the strongest in the Baltics with an increase of 14% thanks to the shipping company Latvijas Kugnieciba (Lasco). The Dutch energy company Vitol increased their shareholding in Lasco to 71% and made a bid to other shareholders to take over the entire company. Vitol has set the bid price at EUR 0.71 per share, which is 58% higher than the most recent stock exchange price Lasco traded with before the transaction. In June, another good result was shown by the equities of the Finnish real estate company Technopolis, which appreciated by roughly 11% on the Helsinki stock exchange.

While the interest rate increase by the Federal Reserve did not particularly affect the markets, the reverberations were greater after the speech of the President of the European Central Bank, which implied that extraordinary support measures would be withdrawn. As a result, by the end of the month, the prices of longer risk-free bonds were once again at the lowest levels of the year and resulted in a decline of both government and corporate bond markets of almost half a per cent. That said, the price risk in connection with the euro interest rate continues to be high. This is a reason as to why we continue to avoid adding longer bonds to the fund portfolio.

The value of the bond portfolio was most affected by the depreciation of the dollar in relation to the euro, which had a negative impact on the positions of JP Morgan, Wells Fargo and the Development Bank of China.

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

See more at Pensionikeskus.ee

Resale of shares

Fund shares can always be sold, in which case income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The third pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

LHV Pension Fund Indeks Pluss
  • High risk level.
  • Suitable for investors with a high risk tolerance, who are prepared to tolerate the risks arising from potentially significant fluctuations in equity markets. Investing in the fund assumes previous investment experience.
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Strategy
The fund invests all of its assets in equity markets and the fund manager does not actively change the fund’s risk level. The fund’s assets are invested in index-following investment funds. The share of funds investing in equities is kept close to 100% of the fund’s volume. Whenever the share of money exceeds 2% of the fund’s volume, the free money is invested at least in the amount exceeding 2%, within five banking days.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,39%.

Information about the fund

Volume of the fund (as of 30.06.2017)950,672.93 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

Depositary fee0,0924%

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

We invest the assets of the fund in index-following investment funds. We keep the share of funds investing in equities close to 100% of the fund’s volume. Whenever the share of money exceeds 2% of the fund’s volume, we invest the free money, at least in the amount exceeding 2%, within five banking days.

No particular indices are followed in investing the assets of the fund. Investments in investment funds investing in equities are distributed between three types of markets – developed markets, emerging markets and frontier markets – based on their approximate share in global gross domestic product (GDP).

The data is presented as at 30.06.2017.

Biggest investments
Vanguard FTSE All-World UCITS ETF9.25%
iShares Core MSCI Emerging Markets ETF9.22%
iShares Core MSCI World UCITS9.02%
db x-trackers MSCI World Index UCITS ETF8.66%
Vanguard Total World Stock ETF8.40%
Vanguard FTSE Emerging Markets ETF8.28%
iShares MSCI ACWI ETF8.15%
Schwab Emerging Markets Equity ETF8.02%
iShares Edge MSCI Min Vol Global ETF7.66%
iShares Edge MSCI World Minimum Volatility UCITS E6.73%
Current asset allocation
Money and deposits1.2%
Shares98.8%
Regional distribution
Money and deposits1.2%
Emerging Markets32.1%
Frontier Markets3.6%
Developed Markets63.2%

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

See more at Pensionikeskus.ee

Resale of shares

Fund shares can always be sold, in which case income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The third pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

The third pillar is flexible and easy to start

1.

Open a securities account
You need to have a securities account at the Estonian Central Register of Securities to invest in the third pillar.

2.

Add money to your account
Add money to your account to buy units of the third pillar.

3.

Make a standing payment order
You can see your third pillar units in your third pillar statement within two banking days.

Market overview of pension funds

viisemann avatar

Markets ignore risks, domestic market offers shelter

Andres Viisemann, Head of LHV Pension Funds

June was a calm month on the securities markets. European shares declined by 2.5% during the month, and North American stock exchanges lost 0.7% of their value when measured in euros. Unfortunately, after the long period of growth, such movement is not all that surprising.

Benefits of III pillar

Ask for advice

Do not hesitate to ask, together we will find a suitable solution.

Reet Roos
Pension Consultant
Mon–Fri 8–17
680 2743
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