LHV Pensionifond L
Active Management
10%
-10%
10%
10 year net yield
3
1
7
Risk level
28.42%
0%
100%
Invests into Estonia
99057
Fund investors

Suitable if

  • you have more than 10 years left until retirement,
  • you have average risk tolerance,
  • your aim is the long-term growth of your pension savings.
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Strategy

The assets of the Fund are invested in various asset classes in both local and foreign markets. The Fund's assets may be invested extensively in unquoted instruments, which are primarily used for investing in securities issued by companies domiciled in the home market. The long-term preferred asset class of the fund is private equity investments.

Performance
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Current year
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The Fund's return is expressed as the net yield after deduction of all fees.

Biggest investments

The data is presented as at 30.04.2021

Biggest investments
German Government 2.25% 04/09/214.97%
France Government 3.25% 25/10/214.48%
German Government 3.25% 04/07/214.09%
France Treasury Bill 25/08/20213.83%
EfTEN Kinnisvarafond3.75%
German Treasury Bill 25/08/20213.09%
iShares Gold Producers UCITS ETF3.05%
Riigi Kinnisvara 1.61% 09/06/273.01%
France Government 2.25% 25/10/222.84%
ZKB Gold ETF2.73%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond3.75%
Riigi Kinnisvara 1.61% 09/06/273.01%
East Capital Baltic Property Fund III1.68%

Asset Classes

The data is presented as at 30.04.2021.

Information about the fund

Information about the fund
Volume of the fund (as of 30.04.2021)1,038,335,414.55 €
Management companyAS LHV Varahaldus
Equity in the fund2 000 000 units
Rate of the depository’s charge0,054% (paid by LHV)
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 0%

Management fee: 0,576%

Success fee: 20% per annum on any increase in the fund's rate of return over the annual increase of Estonian social security pension contribution since the end date of previous calendar year.

Ongoing charges (inc management fee): 1.14%

The ongoing charges figure is an estimate based on the current management fee and the 2020 level of all other recognized costs. Ongoing charges may vary from year to year.

May 2021: Inflation expectations raised the price of gold

Kristo Oidermaa and Romet Enok, Fund Managers

In May, world stock markets moved at a modest pace. The MSCI World index, measured in euros, remained almost at April’s level, falling by 0.1%. The S&P 500 index, which reflects the US stock market, fell 0.9% in euros during the month, the Japanese Nikkei index fell 1.6%, and the MSCI Emerging Markets index rose 0.4%.

The Euro Stoxx 50 performed somewhat better and rose 2.3% in May. The Austrian, Italian and Spanish stock markets stood out in particular, growing by 6.3%, 4.3% and 3.8%, respectively. On the other hand, the Baltic stock markets showed quite mixed results: while the Tallinn stock market index was almost the same as in April, the Vilnius and Riga stock markets grew by 6.2% and 2.7%, respectively, during the month.

In an environment of faster inflation, the gold mining companies in the portfolio of Pension Fund L gained considerable value in May. While intensifying global inflationary pressures raised the price of gold by 7.7% in one month, the share prices of gold mining companies rose even more: Agnico Eagle Mines rose 14.2%, AngloGold Ashanti 14.4%, Barrick Gold 13% and Newmont Mining 16.6%.

Concerning our bond portfolio, we sold the bonds in the Lithuanian state energy company Ignitis in May. The company raised funds through the bond issue in May last year, and since then, the price of the bonds had risen by a little more than 10%. In addition, the bonds have an annual interest rate of 2%.

As regards new investments, we moved on with Sunly bonds at the end of the month. The development of the company’s solar parks has reached a stage where the fund subscribed for the next tranche of Sunly bonds. If all the assumptions are met, the bond will become one of the fund’s largest investments in the next stages of development. The bond has an interest rate of 8% per annum, and the maturity term is 2025.

April 2021: The fund’s performance was supported by several Baltic listed companies

Kristo Oidermaa and Romet Enok, Fund Managers

In April, world stock markets continued to rise, but at a slightly slower pace than in February and March. The MSCI World index rose by 2.2% during the month measured in euros, and the Euro Stoxx 50 index also rose by 1.8%. Among European countries, Finland was a powerful performer with its market index rising by 4.2% in April. The Japanese Nikkei index, on the other hand, fell 1.3% in local currency and 2.4% in euros.

The global emerging market index rose 2.4% in local currency, but due to the strengthening of the euro, remained at 0% in euros. The Baltic stock markets were very strong in April. The Tallinn stock market index rose the most, 7.7%, while the Vilnius and Riga markets rose by 4% and 3.2%, respectively.

The best performer among Baltic shares in the Pension Fund L portfolio was the tour operator Novaturas, whose shares rose by 26.8% during the month. Interest in travel is growing again and the company announced good first quarter sales and profit figures.

Investments in the construction sector brought a good return to Pension Fund L from the Tallinn stock market, as the shares of Merko and Nordecon rose by 18.8% and 17.2%, respectively. Investments in local banking also yielded good results: The shares of Coop Pank rose by 15.1% and Šiaulių bankas returned 12%.

International bond markets continue to be under pressure if interest rates rise. The prices of very long-term government bonds have already fallen by more than 10% since the beginning of the year. As countries support their economies during recovery from the coronavirus crisis, this may have the side effect of a price rise, which is a great fear for bond markets.

As we have already assured in our monthly reviews, LHV pension funds do not have any such long-term fixed-interest investments. Instead, we continue looking for new investments in local companies, and over the past month we have made significant progress with a few potential deals. However, large price movements in international markets may open up additional opportunities for us to make new investments there as well.

March 2021 – New investment in a Spanish airport operator

Kristo Oidermaa and Romet Enok, Fund Managers

The stock market indices of developed countries continued their strong upward trend in March. The Euro Stoxx 50 index, which tracks large European companies, rose by as much as 7.9% during the month, with the German, French, Italian and Swedish stock markets being among the strongest. For example, the German stock exchange index DAX rose 8.9% in March, and the return on the Stockholm stock market, measured in euros, was 8.5%.

However, the performance of the Japanese Nikkei index remained modest last month: 0.7% in local currency and -0.1% in euros. The global MSCI Emerging Markets Index was ˗1.7% in local currency. The decline was driven by Asian stock markets, led by China, where the index returned ˗6.1%. In the Baltic countries, the Tallinn stock market index rose the most by 3.3%. The Vilnius and Riga stock markets fell by 0.2% and 5.2%, respectively.

In March, we added Aena, a Spanish airport operator, as a new equity investment in the portfolio of Pension Fund L. Aena has airports in Madrid, Barcelona, Mallorca and the Canary Islands and a stake in London Luton Airport. We believe that European air traffic and tourism will recover reasonably quickly thanks to the COVID-19 vaccine and that Spanish resorts will continue to be popular destinations for holidaymakers.

The pension fund earned good returns from the Tallinn stock market: Coop Pank, Merko Ehitus and Nordecon all rose more than 10% due to the great interest of small investors.

In our bonds portfolio, we updated the terms of our Alexela investment. Since our investment in early 2018, the company has grown considerably and improved its results. Therefore, some of the restrictions imposed on the company by our bond were already unnecessary. As part of the amended conditions, the money will be returned to the funds in 2023, as much as five years earlier than initially planned.

Another noteworthy event among our portfolio companies was the public bond issue by Coop Pank, raising long-term capital at 5.5% per annum. Along with the growth of the bank’s balance sheet total and the status of a listed company, the price of capital has fallen as expected. As a comparison, LHV Pension Fund L earns just over 7% interest on the investment made in Coop Pank bonds in 2017.

One of the tasks of pension funds is to provide capital to companies at the stage of development where public funds are still unavailable. In addition to higher returns for pension savers, this will boost local emerging businesses.

The state’s increasing role is not conducive to long-term growth
Andres Viisemann, Head of LHV Pension Funds

May was a relatively calm month for securities markets, and the MSCI World Index, which measures global stock markets, returned zero in euros. The US stock market fell slightly (–0.9%), but the European market had a positive return (2.1%).