LHV Pensionifond S
Suitable if
- you have 2–5 years left until retirement age,
- you have low risk tolerance,
- your aim is the preservation and modest growth of your pension savings.
A responsible keeper in S
- We invest the assets of the S fund mainly in bonds. The fund’s assets may also be invested in bonds with a credit rating below investment grade.
- Up to 25% of the fund’s assets may be invested in real estate, items of infrastructure, equity funds and convertible bonds.
- The fund can also be used to grant loans. The fund’s preferred long-term asset class is listed debt instruments.
Romet Enok
Fund Manager at LHV
„Money in seriously large amounts moves in the world in the form of bonds. In truth, a bond is nothing more than a fancy name for a loan contract: parties agree on the time when the money is disbursed, the interest rate, and the repayment.“
Biggest investments
The data is presented as at 30.09.2024
| Biggest investments | |
|---|---|
| Riigi Kinnisvara 1.61% 09/06/27 | 9.30% |
| Eesti Energia perpetual NC5.25 | 7.58% |
| ZKB Gold ETF | 7.07% |
| France Treasury Bill 30/10/2024 | 6.16% |
| Luminor 7.75% 08/06/2027 | 5.98% |
| ALTUMG 1.3% 07/03/25 | 5.20% |
| KBC Group NV 0.625% 07/12/2031 | 4.00% |
| Kojamo 0.875% 28/05/2029 | 3.93% |
| BNP Paribas 2.5% 31/03/2032 | 3.79% |
| Coop Pank 5.0% 10/03/2032 | 3.43% |
Biggest investments in Estonia
| Biggest investments in Estonia | |
|---|---|
| Riigi Kinnisvara 1.61% 09/06/27 | 9.30% |
| Eesti Energia perpetual NC5.25 | 7.58% |
| Luminor 7.75% 08/06/2027 | 5.98% |
Asset Classes
Information about the fund
| Information about the fund | |
|---|---|
| Volume of the fund (as of 30.09.2024) | 25,914,813.41 € |
| Management company | LHV Varahaldus |
| Equity in the fund | 90,000 units |
| Rate of the depository’s charge | 0.0439% (paid by LHV) |
| Depository | AS SEB Pank |
Entry fee: 0%
Exit fee: 0%
Management fee: 0,6120%
Success fee: no commission
Ongoing charges (inc management fee): 0,68%
Ongoing charges are based on expenses for the last calendar year, ie 2023. Ongoing charges may vary from year to year.
Terms and Conditions
Prospectus
September 2024: Bonds continued to rise
Kristo Oidermaa and Romet Enok, Fund Manager
September was another successful month for the fund’s two major investments – Eesti Energia bonds and gold. In broader terms, the expectation that the European Central Bank will continue to cut interest rates (which means an increase in bond prices) is so widely held in the market right now that it is extremely difficult to find attractive new investment opportunities. Rather, the next likely change in the portfolio is a sale of securities.
August 2024: Eesti Energia bonds have started with strong results
Kristo Oidermaa and Romet Enok, Fund Manager
Our major investment this summer – Eesti Energia subordinated bonds – has started with strong results, bringing the fund a return of approximately 3% by the end of August. A significant part of this return was due to the overall decline in interest rates in Europe (reminder: when interest rates are lowered, the prices of most bonds rise automatically). If the company’s results improve, the price of the bonds could increase further. To top it off, the fund accumulates interest at the rate of 7.875% per year in the meantime.
July 2024: We made a new major investment
Kristo Oidermaa and Romet Enok, Fund Manager
The fund has recently made a significant new investment by subscribing to Eesti Energia’s new bonds. These bonds offer an annual interest rate of 7.875%, and Eesti Energia will likely repay the loan in approximately five years. In addition to bank loans, the energy provider raised funds through bonds to complete its extensive investment plan. Capital-intensive construction projects are underway in the renewable energy, network services and fuel business sectors.
To balance this, we decided to reduce the fund’s exposure by selling Glencore’s long-term bonds. Glencore, a Swiss-based global commodities broker, was one of our notable investments made during the bond market turmoil in the fall of 2022. Now that the markets have recovered, we prefer to reduce risks and increase the cash level of the fund.
In addition to pulling back from the international bond market, the fund’s cash reserves were further increased by the local real estate fund, Baltic Horizon. The company repaid the shorter part of the bond they issued in the spring of last year.
June 2024: Gold drives strong performance
Kristo Oidermaa and Romet Enok, Fund Managers
The fund recently concluded another direct investment in Estonia as Pertoni Real Estate Development redeemed its bonds ahead of schedule. The project to develop approximately 70 apartments in Tallinn’s Kotzebue Park has advanced to a stage where further financing will be provided through a bank loan. This marked the end of an approximately two-year investment for the fund, yielding an annual return of 8.5% plus an early redemption payment.
On public markets, our strongest performer in June was again physical gold, one of our portfolio’s largest positions. Recent developments, particularly regarding French politics, created uncertainty, leading many to view gold as the lowest-risk asset class.
For the fund, the first half of the year concluded with solid returns overall, significantly driven by the rise in gold prices. Although bonds have generally offered excellent returns over the past 18 months, and attractive investment opportunities are becoming harder to find, we have one potential major new investment on the horizon.
May 2024: Security Markets are Sending Mixed Signals
Kristo Oidermaa and Romet Enok, Fund Manager
Interest rates continue to move in opposite directions in the euro area. While the 6-month Euribor and other very short-term interest rates are declining in line with the policy of the European Central Bank, long-term interest rates (for example, on ten-year government bonds) are, to some extent, rising.
Textbook wisdom says that this is how investors respond to the risk of the central bank becoming impatient and cutting interest rates too soon, which could cause both inflation and the Euribor to rise again in the future.
Even more striking than the current rise in government bond interest rates is the rise in corporate bond prices, which should happen when the economy is very strong. A strong economy, however, would require the central bank to raise interest rates rather than lower them. Conversely, when the economy is weak, the prices of corporate securities should fall.
In this confusing situation of conflicting signals and high price levels, it is rational not to take on any risk. This is why there were no changes to the composition of our portfolio last month and no significant news concerning it.
The Bank of Japan’s decision shook financial markets
Andres Viisemann, Head of LHV Pension Funds
The upward trend that started at the end of 2022 continued until mid-July. The S&P 500 index, which tracks the largest US companies, reached its all-time high of 5,669 points on 16 July. Japan’s Nikkei 225 index, which on 22 February this year surpassed its peak mark of 34 years ago (38,915.87), reached 42,426.77 points on 11 July.
