II pillar

LHV Pensionifond M
Active Management
10%
-10%
10%
10 year net yield
2
1
7
Risk level
30.68%
0%
100%
Invests into Estonia
13656
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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The Fund's return is expressed as the net yield after deduction of all fees.

Biggest investments

The data is presented as at 31.01.2021

Biggest investments
France Government 2.25% 25/10/225.42%
German Government 2.25% 04/09/214.54%
EfTEN Kinnisvarafond3.00%
ZKB Gold ETF2.83%
Riigi Kinnisvara 1.61% 09/06/272.59%
France Government 3.75% 25/04/212.41%
France Government 25/05/212.32%
German Treasury Bill 14/04/20212.18%
Luminor 0.792% 03/12/242.07%
JP Morgan 1.375% 16/09/211.94%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond3.00%
Riigi Kinnisvara 1.61% 09/06/272.59%
Luminor 0.792% 03/12/242.07%

Asset Classes

The data is presented as at 31.01.2021.

Information about the fund

Information about the fund
Volume of the fund (as of 31.01.2021)146,780,360.70 €
Management companyAS LHV Varahaldus
Equity in the fund400 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 cumulative increase of Estonian social security pension contribution as of 31.08.2019.

Ongoing charges (inc management fee): 0.86%

The ongoing charges figure is an estimate based on the current management fee and the 2019 level of all other recognized costs. Ongoing charges may vary from year to year.

January 2021: BaltCap acquires Piletilevi’s parent company

Kristo Oidermaa and Romet Enok, Fund Managers

January was relatively calm on world stock markets after a strong end to 2020, and the main stock market indices moved slightly and in different directions. The Euro Stoxx 50 index, which tracks large European companies, fell by 1.9% during the month. The German stock exchange, for example, was among the biggest losers with -2.1%, while the Swedish and Finnish stock exchange indexes rose by 4% and 2.1%, respectively.

Measured in euros, the US market index S&P 500 fell by 0.4% during the month and the Japanese Nikkei index rose by 0.7%. The Baltic stock markets were also strong in January. Tallinn stock market yield was 6.9%, the Vilnius stock market index rose by 5.6% and the Riga stock market by 2.6%.

BaltCap, a domestic private equity company in the portfolio of Pension Fund M, announced that it will acquire a majority stake in Baltic Ticket Holdings OÜ, which includes Piletilevi AS, a well-known ticket sales company in Estonia. Baltic Ticket Holdings was founded in 1997 in Estonia and operates now also in other Baltic countries and Belarus. Through digital channels and 700 points of sale, the company sold more than 6 million tickets for more than 36,000 events in 2019.

Bond markets remained largely negative in the first month of the year in Europe, the United States and emerging markets. The decline was not sharp, but the US and especially German markets have been steadily declining since early November, when the results of the Pfizer/BionTech vaccine clinical trial became available. The movement of these two anchors has had a very wide-ranging impact on the markets.

Despite a slight fall in prices (and rising interest rates), sales of new securities continue to grow strongly: in January, for example, European countries borrowed a total of about 40% more than in January 2017. There is currently no alternative to borrowing to compensate for the reduced tax revenue.

We have refrained from acquiring high-risk bonds for the fund. Major local companies in the fund’s portfolio have so far reported expected or even higher-than-expected results.

December 2020: performance supported by greater equity risks taken during the coronavirus crisis

Kristo Oidermaa and Romet Enok, Fund Managers

Although the Covid-19 pandemic caused a significant fall in stock markets around the world in the spring, stock markets were largely able to recover by the end of the year. The US S&P 500 and the Nasdaq index even reached new highs. Measured in euros, the Japanese Nikkei index and the MSCI Emerging Markets Index rose by 11.6% and 6.4% year-on-year, respectively.

By contrast, the Euro Stoxx 50, which reflects Europe’s largest companies, was 3.2% negative. The biggest losers were the Spanish, British and French stock markets, while both the Nordic and German stock markets showed good returns.

In the Baltics, the Vilnius stock market had the best result with 14.7%, the Riga stock market index rose by 9.7% and the return on the Tallinn stock market was 5%.

LHV Pension Fund M performed well in 2020, largely supported by investments made during the year in gold mining companies and the Physical Gold Fund. These investments accounted for more than 6% of the portfolio in December. The fund’s performance was also supported by investments in banking sector equities.

During the year, the pension funds also acquired several commercial real estate properties: an office building on Tartu Road in Tallinn and stock-office buildings in Jüri, Rae Rural Municipality. Both investments earn stable rental income for the pension funds and have development potential. We also made an investment in the rental apartment fund launched by EfTEN Capital.

In the international bond markets, we gradually reduced our risks throughout the year. When global financial markets began to fall sharply in February, we took advantage of having held a significant portion of the fund’s assets in short-term high-rated European bonds. We sold them in large quantities and instead acquired positions in the declined stock market.

When stock markets started to rise in the second half of the year, we sold many of our winter investments and invested in short-term German and French government bonds.

At the same time, we reduced the fund’s position in international bonds with a higher credit risk to almost zero. The sale of Sampo and Danske Bank bonds played a significant role here. We took advantage of the significant cheapening of financial sector stocks in Europe by the spring. That’s why we sold most of these bonds and bought stocks.

We also continued to work on local transactions, reaching an agreement on the financing of the new Peetri Centre, in Peetri Village near Tallinn. The company raised money from pension funds with two bonds, which yield a current return of 7% per year for the fund.

We also signed agreements to finance the expansion plans of the renewable energy company Sunly. The company plans to use the capital from pension funds to make large investments, and the interest rate of the investment is 8% per annum.

In return, the fund received an early repayment of the loan granted for the purchase of the online classifieds environment auto24. The successful investment of the Estonian private equity company BaltCap brought the fund a little over 20% return in the form of interest and premium payments over three years.

Although the overall performance of the European bond market can be considered good last year, its best-performing segment had a yield of just over 4%. As shown above, we can clearly use the capital of pension funds more productively by financing local businesses. We will continue to focus on this line of business this year.

November 2020: new investments in real estate and renewable energy sectors

Kristo Oidermaa and Romet Enok, Fund Managers

November was extremely upbeat for the world’s stock markets, largely due to the good news from COVID-19 vaccine manufacturers. Europe was strongest in the developed world: the Euro Stoxx 50 index rose by as much as 18.1% during the month. Among the biggest winners were Spain, Italy and France with yields exceeding 20%.

The German stock market index rose by 15% and the Swedish and Finnish stock markets rose by more than 11%. The Japanese Nikkei index, measured in euros, rose 12.5% in November. In the Baltic countries, the Tallinn stock market followed the general market rise and its index rose by 10.2% over the month. The Vilnius stock market rose 3.9% while the Riga stock market index fell by 0.2%.

Pension Fund M made a new investment in the EfTEN Residential Fund, which will invest in rental properties across the Baltics. The fund’s first investment is in a 112-apartment building in the new Kadaka Forest Park development in Tallinn’s Mustamäe district. Completion of the apartment building is planned for autumn 2021. In total, the real estate fund raised 33 million euros in the first round of financing and plans to build the next rental property in Lithuania.

In the bond portfolio, our only international stock market investment without a credit rating ended prematurely when the Danish-owned Lithuanian pig farm Idavang repaid its obligations ahead of schedule. We subscribed to the company’s bonds when they were issued in December 2017, and in exactly three years, the investment yielded approximately 21% for the fund.

At the same time, we reached an agreement on new investments in the Estonian renewable energy company Sunly. Once certain conditions are met, in the next few months LHV funds will subscribe to Sunly’s five-year bonds with an annual interest rate of 8%. As a producer of green energy, Sunly is growing in many directions, and the long-term investment of our pension funds will help the company raise bank loans in order to implement large-scale investment plans.

Those who accumulate reserves will do better
Andres Viisemann, Head of LHV Pension Funds

A very dramatic, at times even surreal 2020 is finally behind us. Both people and companies were forced to make difficult choices about how to reorganise their lives. Last year taught us that self-sufficiency can be more important than short-term efficiency, and that reserves are needed even if it’s just to be able to wait for help.