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III pillar

Investment in the future on which the state refunds the income tax

  • Ensure your future through the third pillar
  • A wise monthly investment
  • The state refunds the income tax on the investment
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View the current state of your pension

Income tax incentive

The state refunds the income tax on the money invested in a third pillar pension fund. The allowance applies to payments that represent up to 15% of your gross income, but not in excess of EUR 6000 per year. For instance, if you invest EUR 100, you will receive an income tax refund of EUR 20 next March.

III pillar funds

LHV Pension Fund Intress Pluss

Suitable if

  • at least 2 years left until retirement
  • you are risk averse
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Strategy
LHV Pension Fund Interest Plus is a conservative fund investing into interest and credit instruments. According to the fund’s investment strategy, the fund’s assets are mainly allocated into the high-quality debt securities of governmental and non-governmental issuers and deposits at credit institutions. The fund does not invest into shares or other equity instruments. In the selection of the fund’s investments, low risk and maintenance of value is preferred over a potential high yield. To best implement the fund’s investment strategy, both dispersed investment instruments as well as direct investments into debt securities are used in the fund.

Expenses

Entry fee 0% / Exit fee 1% / Management fee 0.95%

Information about the fund

Volume of the fund (as of 30.04.2017)537,001.16 €

Price of a unit

Management companyLHV Varahaldus

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

The data is presented as at 30.04.2017

Biggest investments
Lithuania 05/20224.88%
Bulgaria 09/20244.17%
IBM Corporation 11/20203.99%
Korea (Republic of) 12/20213.36%
Lithuania 02/20233.28%
Romania 10/20253.19%
Elering 07/20183.05%
Apple 11/20222.91%
China Development Bank 01/20222.90%
JP Morgan Chase 08/20212.38%
Current asset allocation
Money and deposits57.1%
Government bonds21.6%
Corporate bonds21.3%
Regional distribution
Money and deposits57.1%
The Baltic states16.6%
Europe (excl. the Baltic states)8.4%
Asia6.3%
North America11.6%
LHV Pension Fund 100 Pluss

Suitable if

  • at least 10 years left until retirement
  • you have high risk tolerance
Buy units

Strategy
LHV Pension Fund 100 Plus is a 3rd pillar fund investing up to 100% into the asset class of shares. In order to ensure the liquidity of the fund’s assets or to protect their value, in certain market situations the fund may invest into debt securities and deposits at credit institutions. In a limited scope, the fund also invests into alternative asset classes, as well as immovable property and assets classes related to commodities.

Expenses

Entry fee 0% / Exit fee 1% / Management fee 1.55%

Information about the fund

Volume of the fund (as of 30.04.2017)4,688,827.13 €

Price of a unit

Management companyLHV Varahaldus

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

The data is presented as at 30.04.2017

Biggest investments
EfTEN Kinnisvarafond6.65%
iShares STOXX Europe 600 DE5.69%
iShares MSCI Japan EUR Hedged UCITS ETF4.60%
Allianz 07/20454.34%
iShares STOXX Europe 600 Utilities3.20%
Romania 10/20253.10%
Latvenergo 12/20172.98%
Citadele banka 12/20262.91%
JP Morgan Chase 08/20212.39%
Wells Fargo & Company 07/20212.38%
Current asset allocation
Money and deposits43.8%
Government bonds4.8%
Corporate bonds17.2%
Real estate6.7%
Shares27.5%
Regional distribution
Money and deposits43.8%
The Baltic states17.7%
Europe (excl. the Baltic states)32.0%
North America6.5%
LHV Supplementary Pension Fund

Suitable if

  • you have more than 10 years left until retirement age
  • you have low risk tolerance
  • your aim is to preserve your savings and avoid losses
Buy units

Benefits for you
The state refunds the income tax on the money invested in a third pillar pension fund. For instance, if you invest EUR 100, you will receive an income tax refund of EUR 20 next March. Investing in LHV Supplementary Pension Fund is simple. All you need is a securities account at the Estonian Central Register of Securities, which can be opened free of charge at LHV.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 1% / Management fee 1%.

Information about the fund

Volume of the fund (as of 30.04.2017)9,211,394.68 €

Price of a unit

Management companyLHV Varahaldus

Depositary where the fund’s assets are heldSwedbank

We will allocate your money into international enterprises, the development of which we believe in. At the same time, it must be taken into consideration that the future of these enterprises depends on both their internal decisions as well as the changes in the global economy.

The data is presented as at 30.04.2017.

Biggest investments
EfTEN Kinnisvarafond5.91%
East Capital Baltic Property Fund II5.74%
Bulgaria 09/20243.72%
Lithuania 11/20243.00%
Amber Circle Funding 12/20222.92%
WisdomTree Japan Hedged Equity Fund2.78%
Citadele banka 12/20262.65%
Tallinna Kaubamaja2.58%
Olainfarm2.56%
Lithuania 02/20232.48%
Current asset allocation
Money and deposits21.8%
Government bonds13.6%
Corporate bonds22.8%
Real estate12.5%
Shares29.4%
Regional distribution
Money and deposits21.8%
The Baltic states43.5%
Europe (excl. the Baltic states)17.3%
Asia7.1%
North America5.9%
Other4.4%

Results were supported by investments into the European healthcare and automotive industries

Romet Enok, Portfolio Manager

On the background of the recovering economic growth and inflation, March ended up as positive for the global stock markets. Solid yields were displayed mainly by the European stock markets led by Italy, Spain, France and Germany. The Latin American stock markets, with the exception of Brazil, also continued their year with growth. Investment in the Japanese stock market, on the other hand, had a negative impact on the pension fund’s yield as its stock market index fell by 1% measured in the local currency.

The Baltic stock markets ended the month with a positive yield, with the stock market index of Riga (4%) increasing the most. In addition to this, the results of LHV Pension Fund Extra were supported by investments into the European healthcare and automotive industries.

Both the corporate as well as government bonds market declined slightly in the past month, but still recovered from the rather notable decline of the middle of the month in the course of the last week. Bond markets are currently lacking clear direction: the macroeconomy and political events are fighting for investors’ attention.

There were more events on the level of the fund’s single investments. After a longer analysis process, LHV’s pension funds came to an agreement for the financing of the purchase of the portal Auto24. This purchase by the company’s management and private capital investors is financed by the funds through two bonds: one with an interest rate of 3% as an alternative to a bank loan and another with a rate of 12% as an alternative to equity.

An unpleasant surprise was the decline of the bonds of Brasil Foods due to the scandal that erupted on the topic of hygiene problems in the Brazilian meat industry. Due to this, the company’s bond fell 7%, but also managed to make up for half of it by the end of the month.

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

See more at Pensionikeskus.ee

Resale of shares

Fund shares can always be sold, in which case income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The third pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

LHV Pension Fund Indeks Pluss

Suitable if

  • you want to invest on financial markets on a continuous basis,
  • wish to grow your pension pillar at the lowest possible costs,
  • have prior personal investment experience.
Buy units

Benefits for you
The state refunds the income tax on the money invested in a third pillar pension fund. For instance, if you invest EUR 100, you will receive an income tax refund of EUR 20 next March. LHV Pension Fund Indeks Pluss makes investing simple. All you need is a securities account at the Estonian Central Register of Securities, which can be opened free of charge at LHV.

Rate of return

From the beginning/ Current year/ Current month

Expenses

Entry fee 0% / Exit fee 0% / Management fee 0,39%.

Information about the fund

Volume of the fund (as of 30.04.2017)890,788.95 €

Price of a unit

Management companyLHV Varahaldus

Equity in the fund468 750 units

Depositary fee0,0924%

Depositary where the fund’s assets are heldDanske Bank A/S Eesti filiaal

We invest the assets of the fund in index-following investment funds. We keep the share of funds investing in equities close to 100% of the fund’s volume. Whenever the share of money exceeds 2% of the fund’s volume, we invest the free money, at least in the amount exceeding 2%, within five banking days.

No particular indices are followed in investing the assets of the fund. Investments in investment funds investing in equities are distributed between three types of markets – developed markets, emerging markets and frontier markets – based on their approximate share in global gross domestic product (GDP).

The data is presented as at 30.04.2017.

Biggest investments
db x-trackers MSCI World Index UCITS ETF9.44%
Vanguard Total World Stock ETF9.19%
iShares MSCI ACWI ETF8.91%
Schwab Emerging Markets Equity ETF8.77%
iShares Core MSCI Emerging Markets ETF8.50%
iShares Core MSCI World UCITS7.87%
Vanguard FTSE All-World UCITS ETF7.80%
Vanguard FTSE Emerging Markets ETF7.46%
iShares Edge MSCI World Minimum Volatility UCITS E7.34%
Vanguard FTSE Emerging Markets UCITS ETF7.24%
Current asset allocation
Money and deposits0.5%
Shares99.5%
Regional distribution
Money and deposits0.5%
Emerging Markets32.0%
Frontier Markets4.0%
Developed Markets63.5%

Pension agreement

The state does not tax payments from the 3rd pension pillar if you have concluded an insurance contract under which regular pension payments will be made to you for the rest of your life.

See more at Pensionikeskus.ee

Resale of shares

Fund shares can always be sold, in which case income tax applies. After turning 55, but not before five years have passed from the initial investment, disbursements are taxed a rate of 10%.

The third pillar savings can also be bequeathed

The heir can then decide what to do with the inherited assets—whether to transfer them to their account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.

The third pillar is flexible and easy to start

1.

Open a securities account
You need to have a securities account at the Estonian Central Register of Securities to invest in the third pillar.

2.

Add money to your account
Add money to your account to buy units of the third pillar.

3.

Make a standing payment order
You can see your third pillar units in your third pillar statement within two banking days.

Market overview of pension funds

viisemann avatar

Domestic market offers valuable investment opportunities

Andres Viisemann, Head of LHV Pension Funds

March was a relatively calm month on securities markets. Emotions, both positive and negative, related to the US presidential election are beginning to slowly dissipate, and investors are gradually adjusting to the character and moods of the new leader of the world’s most powerful country.

Benefits of III pillar

Ask for advice

Do not hesitate to ask, together we will find a suitable solution.

Reet Roos

Pension Consultant

Mon–Fri 8–17

680 2743
Sign up for a consultation