II pillar

LHV Pensionifond M
Active Management • Balanced Strategy
10%
-10%
10%
10 year net yield
2
1
7
Risk level
31.19%
0%
100%
Invests into Estonia
13367
Fund investors

Suitable if

  • you have 3–10 years left until retirement age,
  • you have moderate risk tolerance,
  • your aim is the long-term stable growth of your pension savings.
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Strategy
When investing in assets, the fund prefers cash-flow assets and, where possible, the local market, including less liquid private equity and real estate investments. The investments are predominantly in local currency and up to 75% of the fund's assets can be invested directly in equities. The fund's long-term preferred asset class is real estate investments.

Performance
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Current year
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Biggest investments

The data is presented as at 30.09.2019

Biggest investments
Luminor 1.5% 18/10/213.59%
EfTEN Kinnisvarafond3.26%
Riigi Kinnisvara 1.61% 09/06/272.91%
France Government 2.25% 25/10/222.49%
Berkshire Hathaway 0.25% 17/01/212.41%
Transpordi Varahaldus 2.85% 18/04/252.32%
Tartu linn 25/10/321.97%
JP Morgan Chase And Co 27/01/201.90%
BNP Paribas 0.75% 11/11/221.90%
Coop Pank 6.75% 04/12/20271.79%

Biggest investments in Estonia

Biggest investments in Estonia
Luminor 1.5% 18/10/213.59%
EfTEN Kinnisvarafond3.26%
Riigi Kinnisvara 1.61% 09/06/272.91%

Asset Classes

The data is presented as at 30.09.2019.

Information about the fund

Information about the fund
Volume of the fund (as of 30.09.2019)130,923,742.65 €
Management companyAS LHV Varahaldus
Equity in the fund380 000 units
Rate of the depository’s charge0,0576% (paid by LHV)
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 0%

Management fee: 0.72%

Ongoing charges (inc management fee): 1.2%

Ongoing charges are based on expenses for the last calendar year, ie 2018. Ongoing charges may vary from year to year.

October 2019 – Danske’s bonds have offered a good rate of return

Romet Enok, Fund Manager

October went by relatively calmly on the world’s stock markets, and exchange indexes showed predominantly positive rates of return. The rate of return of Euro Stoxx 50, an index that is made up of 50 of the largest listed companies in the euro area, was +1.1% in October; good results were also shown by the German stock exchange with an increase of 3.5%, and the Swedish stock exchange with a rate of return of 5.2%. At that, the British stock market index fell 2.2% due to Brexit-related tensions. The result of the Japanese stock exchange was a strong 5.4% in local currency; however, the rate of return remained at 3.2% in euros. In the Baltics, the Vilnius stock exchange showed the best rate of return with an increase of 1.6%; the Tallinn stock exchange also rose by 1.5% in October. The Riga stock exchange had to accept a 0.3% decline.

Superangel, a venture capital fund that belongs to the Pension Fund M portfolio, made another big investment in October, being the lead investor in the round of raising money for start-up company Eziil Productions Intelligence. Eziil Productions develops software for manufacturing companies for digitalising processes, and investments were raised in the amount of EUR 300,000 in total. The company intends to use the money for product development, expansion, and involving external knowledge.

In the bond portfolio, we finalised the purchase of securities from the issue of Ekspress Grupp that was mentioned in the previous monthly review. All bonds were issued to LHV funds; their annual interest rate is 6%; they will be redeemed after eight years, and have been issued supplementary security by the company’s chief shareholder. The company will use the funds raised with the issue for expansion.

Among foreign investments, the price increase of Danske’s subordinated long-term bonds is once again worth mentioning in October. Even though the fines and punishments to be imposed on the Danish bank are far from clear, investor confidence is recovering – the two Danske bonds that are in our portfolio have offered a 24%–25% rate of return this year. At the same time, all main European bond markets were on the negative side, falling slightly less than one per cent, on average. We work with local issuers and continue to see investment opportunities here.

September 2019 – Financing the expansion of Ekspress Grupp

Romet Enok, Fund Manager

In global markets, September mainly had a positive rate of return and the stock exchanges of both developed and developing countries increased. The index that encompasses the 50 largest publicly traded companies in the Eurozone increased by 4.3% within a month and the largest increases were, for instance, the stock exchange indexes of Finland and Germany with rates of return of 4.9% and 4.1%, respectively. The Japanese stock exchange index demonstrated a 5.1% rate of return in its local currency, whereas in EUR the increase was 4.1%. The Baltic stock exchange indexes moved quite little in September: The Vilnius and Riga stock exchanges increased by 0.3% and 0.6%, respectively, and the rate of return for the Tallinn stock exchange was -0.9%.

The private equity fund BPM Mezzanine Fund, which is part of the Pension Fund M, made a new investment in September and financed the buyout of the Latvian dairy industry company Smiltenes Piens. The company produces a wide range of dairy products and is mainly known in Latvia for its cheeses. In the future, the new owner’s strategy focuses on increasing the company’s export capability and expanding to new markets.

Regarding our bonds portfolio, in the beginning of October, we reached a deal with Ekspress Grupp, according to which the company shall borrow money from the fund in the form of bonds to finance its expansion plans. Eight-year bonds have been issued supplementary security by the company’s chief shareholder and the bonds shall have interest of 6% per year. We see that local companies are increasingly more interested in raising capital from pension funds, and negotiations with some future issuers regarding making an investment in the form of a bond, are reaching their final stage.

The main bond markets of Europe had a slight decline in September. Considering the high price level of the markets, we shall continue working with the goal to sell bonds with a high price on the European stock exchanges and invest the gained funds into local companies.

August 2019 – Auto24 will have a new owner

Romet Enok, Fund Manager

Against the background of the economic slowdown and the US-China trade war, the world's stock markets showed a predominately negative rate of return again in August. The index of Euro Stoxx 50, which gathers 50 of the biggest publicly traded companies of the Eurozone, decreased by 1.1% in a month and, for example, the stock exchange indexes of Germany and Finland both decreased by 2.0%. The rate of return of the Japanese stock market was -3.8% in the local currency and -0.5% in euros. The stock market of the Baltic states also followed the general decline in August. The stock indexes of Tallinn and Riga showed a -1.7% and -1.6% rate of return respectively, and the rate of return of the Vilnius stock exchange remained at -0.9%.

EfTEN Real Estate Fund 4, which belongs to the portfolio of pension fund M, made its third investment and purchased trading and commercial premises in Kaunas, Lithuania. The complex built in 2017 includes a shopping centre, which has Maxima and IKEA as its biggest tenants, and an A-class office building where many well-known IT companies are renting premises.

In August, it was reported that the portal auto24, which belonged to the management board of the company and a local investor BaltCap, would be put up for sale. After the sale of auto24, it is likely that the new owner will prematurely repay the loans of the company to our funds. The investment made at the beginning of 2017 was the first significant money placement of the new wave after easing the national restrictions of the pension funds. LHV funds were then fully financing the company's purchase from the former Finnish owners. It was and still is one of the biggest local investments of LHV funds. The final rate of return of the investment depends on the deadline for repayment; by now the funds have earned interest of a little more than 16% from the given loan during the two and a half years that have passed.

The European bond market is looking forward to the central bank's September meeting in which investors wish to see the relaunch of the bond purchasing programme. The price levels in the markets are so high that in the case of a very high rating it will be possible for banks to borrow money from markets for ten years with a negative rating. We will continue to work with many Estonian companies and hope to have new investments soon, especially in this direction.

The euro of today must also serve the needs of tomorrow
Andres Viisemann, Head of LHV Pension Funds

All of the world’s largest stock markets remained slightly on the plus side in September. Measured in euros the S&P500 Index, which includes the largest US enterprises, rose by 2.5% last month, and the value of the Stoxx 600 Index, which reflects the well-being of Europe’s largest enterprises, rose by 3.6%.