II pillar

LHV Pensionifond S
Active Management
10%
-10%
10%
10 year net yield
2
1
7
Risk level
15.39%
0%
100%
Invests into Estonia
8963
Fund investors

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.
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Strategy

The Fund's assets are mainly invested in bonds. The Fund's assets may be invested in sub-investment grade bonds. Up to 25% of the fund's assets may be invested in real estate, infrastructure, equity funds and convertible bonds. The Fund may also grant a loan. The long-term preferred asset class of the fund is listed debt instruments.

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 30.06.2020

Biggest investments
Temasek 0.5% 01/03/224.95%
Latvenergo 1.9% 10/06/224.81%
Luminor 1.5% 18/10/214.69%
Riigi Kinnisvara 1.61% 09/06/274.48%
German Government 3.25% 04/07/214.00%
Transpordi Varahaldus 2.85% 18/04/253.86%
Investor 4.5% 12/05/233.14%
France Government 3.75% 25/04/213.12%
Ignitis Grupe 2% 21/05/303.04%
Romania 2.875% 28/10/242.99%

Biggest investments in Estonia

Biggest investments in Estonia
Luminor 1.5% 18/10/214.69%
Riigi Kinnisvara 1.61% 09/06/274.48%
Transpordi Varahaldus 2.85% 18/04/253.86%

Asset Classes

The data is presented as at 30.06.2020.

Information about the fund

Information about the fund
Volume of the fund (as of 30.06.2020)53,519,271.14 €
Management companyAS LHV Varahaldus
Equity in the fund270 000 units
Rate of the depository’s charge0,0564% (paid by LHV)
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 0%

Management fee: 0.60%

Success fee: no commission

Ongoing charges (inc management fee): 0.69%

Ongoing charges are based on expenses for the last calendar year, ie 2019. Ongoing charges may vary from year to year.

June 2020 – We purchased bonds issued by the Republic of Estonia

Kristo Oidermaa and Romet Enok, Fund Managers

We made a big new investment in the fund by subscribing to bonds issued by the Republic of Estonia when the state borrowed 1.5 billion euros for 10 years in the form of securities. Estonia’s debt burden continues to be much smaller compared with other countries, thanks to which the bond’s credit rating is very high.

However, compared with countries who have decades-long active relationships with investors, Estonia has to offer a little more attractive conditions to investors in order to raise money, as it is essentially a newcomer on the bond market. The security is also the perfect match for our current market expectations, in relation to which we are maintaining a low risk level.

Bond markets continued to rebound in June, but overall a large proportion of market segments remained in the red in the first half of the year. A clear exception in both the euro area and the United States is government bonds: an increase in their prices has always been a sign of problems for most companies. Unfortunately, this signal is currently incomplete: whilst government bonds are very popular, corporate securities are not showing a great decrease.

May 2020 – We purchased bonds of Lithuanian energy company

Kristo Oidermaa and Romet Enok, Fund Managers

Markets continued to recover from March lows, while a clear link could be detected in relation to the movement of bond prices: the more high-risk the borrower, the more the price of their bonds increased. Thus, lower-rated bonds offered better returns than high-rated bonds; the demand for unsecured bonds was greater than for secured bonds and the price of long-term bonds increased more than that of short-term bonds. Additionally, the organisation of new bond emissions on European markets progressed at a record speed in May.

The impact of this extremely deep recession on individual companies and states will be revealed in the coming quarters. The price increase in recent weeks can therefore be explained only by central banks announcing support measures in March and April. Whether borrowers’ solvency actually remains at an acceptable level is a risk that many investors are currently taking probably without thinking.

In May, we made a new large investment in the fund when Lithuanian national energy company Ignitis borrowed money for 10 years with an interest rate of slightly over 2%. Some borrowers who are raising new money must currently pay a premium that is larger than usual in order to attract investors and thus Ignitis’ bonds generated additional return for the fund in an amount almost equal to annual interest already by the end of the month.

April 2020 – Central banks extended their supporting hand to the markets

Kristo Oidermaa and Romet Enok, Fund Managers

Bond markets have recovered to varying degrees from their sharp decline in March. While in the United States, the bond prices of companies with stronger as well as weaker solvency have increased sharply as a result of the extremely aggressive measures taken by the Federal Reserve, in Europe price movements have been considerably more modest.

A possibility to raise funds is opening up again for enterprises. The situation facing companies affected most by the crisis, is characterised by Boeing, who had to offer investors an interest rate of 4.5–6% (depending on the maturity) in order to get a loan.

As unemployment is increasing in many parts of the world, and the credit quality of enterprises is deteriorating, we will continue to keep the assets of fund S primarily in short-term bonds with sound solvency in the future.

Pushing current risks into the future
Andres Viisemann, Head of LHV Pension Funds

Share prices continued to increase in June. The Euro Stoxx 50 Index, which follows the value of European companies, added 6.4% when taking into account dividends and the S&P 500 Index, which unites the largest US companies, grew by 0.7% in euros. The rapid rebound of equity markets from the March low has been unexpected and impressive: at the end of June these two indices were only down by 12.4% and 3.2% respectively since the start of the year. The increase has not been dampened by the fact that the recovery speed and scope of the world economy is still unclear.