II pillar

LHV Pensionifond XL
Active Management
10%
-10%
10%
10 year net yield
3
1
7
Risk level
22.57%
0%
100%
Invests into Estonia
39255
Fund investors

Suitable if

  • you have more than 15 years left until retirement,
  • you are prepared to take above-average risks,
  • your aim is the long-term growth of your pension savings.
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Strategy

The Fund prefers foreign markets, more liquid and traded instruments on regulated markets when investing assets. The assets of the Fund may be invested in their entirety in equities, equity funds and other equity-like instruments. The Fund is allowed to borrow up to 10% of the Fund's assets value. The long-term preferred asset class of the fund is public 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 31.01.2021

Biggest investments
German Government 2.25% 04/09/215.25%
France Government 3.25% 25/10/215.01%
German Government 3.25% 04/07/214.85%
France Government 3.75% 25/04/214.58%
France Government 25/05/213.70%
France Government 2.25% 25/10/223.04%
German Treasury Bill 14/04/20213.03%
ZKB Gold ETF2.60%
iShares Gold Producers UCITS ETF2.48%
EfTEN Kinnisvarafond2.35%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond2.35%
Riigi Kinnisvara 1.61% 09/06/272.02%
East Capital Baltic Property Fund III1.76%

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)251,626,367.58 €
Management companyAS LHV Varahaldus
Equity in the fund530 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): 1.13%

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: we made a new investment in a silver miner

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%. However, the global index for emerging markets offered a strong yield of 3.8% measured in euros, largely due to a more than 8% rise in the Chinese stock market. 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%.

The performance of Pension Fund XL was driven again by investments in mining-related companies, whose stocks rose in anticipation of larger economic recovery packages.

As a new investment, we added Pan American Silver Corp., a company that mines and processes silver and owns mines in several Latin American countries. However, we sold the investment in the copper mining company KAZ Minerals, as its management announced plans to buy out the company. The pension funds earned more than 150% on the investment.

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 risk taken in spring

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%.

The good performance of LHV Pension Fund XL in 2020 was largely supported by the investments made during the spring stock market downturn, when we acquired shares on the stock markets of the Nordic countries, Germany, the USA and other countries. For example, the US dental company Align Technology, the car accessories manufacturer Hella, the infrastructure consulting company Sweco and the Latin American e-commerce giant MercadoLibre yielded over 100% returns.

Last year, we also invested heavily in companies involved in gold mining and the Physical Gold Fund. These investments accounted for nearly 8% of the fund’s portfolio in December and earned a good return over the year.

During the year, the pension funds acquired several commercial real estate properties: an office building on Tartu Road in Tallinn and stock-office buildings in Jüri, Rae Rural Municipality. 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 financing 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.

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: LHV pension funds acquired three commercial buildings

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%.

LHV pension funds made a new direct investment in real estate by acquiring three stock-office type commercial buildings in Jüri, Rae Rural Municipality, Harju County, Estonia. The building complex has more than 6,000 square metres of leased space, the largest tenant being the Tanker brewery. The buildings have an excellent location right next to the Tallinn–Tartu highway and the Jüri ring road. There are already several logistics centres in the area, and if an Ikea store is added, we expect our investment to gain more value.

In regard to new investments in the bonds portfolio, 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.