II pillar

LHV Pensionifond XL
Active Management • Aggressive Strategy
10%
-10%
10%
10 year net yield
3
1
7
Risk level
29.43%
0%
100%
Invests into Estonia
35093
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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Biggest investments

The data is presented as at 30.09.2019

Biggest investments
Luminor 1.5% 18/10/213.61%
EfTEN Kinnisvarafond3.24%
Riigi Kinnisvara 1.61% 09/06/272.87%
France Government 2.25% 25/10/222.56%
East Capital Baltic Property Fund III2.48%
East Capital Baltic Property Fund II2.28%
Berkshire Hathaway 0.25% 17/01/212.19%
Allianz 07/12/202.02%
JP Morgan Chase And Co 27/01/201.92%
iShares STOXX Europe 600 Health Care1.88%

Biggest investments in Estonia

Biggest investments in Estonia
Luminor 1.5% 18/10/213.61%
EfTEN Kinnisvarafond3.24%
Riigi Kinnisvara 1.61% 09/06/272.87%

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)188,852,743.37 €
Management companyAS LHV Varahaldus
Equity in the fund500 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): 1.62%

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

October 2019 – Livonia Partners purchased a glass manufacturer

Kristo Oidermaa, 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. The global emerging markets index rose by 4.1% within the month, driven by the great results in several Asian and Latin American countries. 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.

The private capital fund Livonia Partners, which belongs to the Pension Fund XL portfolio, made another new investment, purchasing Klaasimeister AS, an Estonian company engaged in glass manufacturing and processing. The company’s customers include installers of glass façades and manufacturers of dividing walls and barriers in Scandinavia and the Baltics. This is Livonia’s second takeover this year – at the beginning of the year, they also purchased Fenestra, a window manufacturer.

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 – In September, the stock markets were positively minded

Kristo Oidermaa, 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 MSCI developing markets index also showed a good result, increasing by 2.5% in EUR, whereas Latin America that has been weak for a while now also showed a 3.3% rate of return. 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 venture capital fund Tera Ventures, which is part of the Pension Fund XL, was the leading investor in the second round of funding for the Estonian-USA company Snackable. Snackable is developing an audio content search engine, based on artificial intelligence, and since 2018 has raised a total of 2.3 million US dollars’ worth of investments. The company shall use the new funds to expand their development team in Estonia and also for entering international markets.

In our bonds portfolio, we again sold Czech, Lithuanian, Latvian, and Romanian government bonds which have so far have had a good rate of return but which could result in a minimal or negative profit if retained until the end with their current high price.

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

Kristo Oidermaa, 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 index value of global developing markets also decreased by -3.9% in euros, the weakest ones being Latin American countries led by Argentina. 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%.

The private capital fund BaltCap Private Equity Fund II, belonging to the portfolio of pension fund XL, had a successful exit from the investment into the vehicle sales portal auto24. The company was purchased by Baltic Classifieds Group, the portfolio of which includes many advertisement portals of Baltic countries, including KV.ee, City24.ee and Osta.ee. The transaction is planned to be completed during the current year after receiving the respective approval from the Estonian Competition Authority.

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 is currently possible for banks to borrow money for ten years with a negative rating. We are still looking for alternatives for this in the form of financing Estonian companies. From the fund's investments, Sampo, which was purchased in August, also continued with the price increase. The bonds of the Finnish insurance group had produced about 15% in less than four months by the end of August.

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%.