III pillar

LHV Täiendav Pensionifond
Active Management
10%
-10%
10%
10 year net yield
10%
-10%
10%
5 year net yield
10%
-10%
10%
3 year net yield
10%
-10%
10%
2 year net yield

Suitable if

  • you have medium risk tolerance,
  • you are aware of investment risks and wish to make long-term investments in a supplementary funded pension, with the aim of using the accumulated money tax-effectively after reaching retirement age.

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Strategy
The fund makes significant investments in equity markets: to ensure maximum growth, the proportion of equity markets is kept close to 75% of the value of the fund’s assets. The proportion of equity markets may also be higher – up to 95% – or lower (in recent years close to 40%), if considered reasonable by the fund manager.

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 31.03.2021.

Biggest investments
German Government 1.5% 04/09/226.23%
France Government 2.25% 25/10/225.23%
France Government 25/05/214.70%
EfTEN Kinnisvarafond4.55%
France Government 3.25% 25/10/214.32%
German Government 2.25% 04/09/214.27%
France Government 3.75% 25/04/213.24%
German Treasury Bill 14/04/20213.13%
East Capital Baltic Property Fund III2.91%
iShares Gold Producers UCITS ETF2.73%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond4.55%
East Capital Baltic Property Fund III2.91%
East Capital Baltic Property Fund II2.30%

Asset Classes

The data is presented as at 31.03.2021.

Information about the fund

Information about the fund
Volume of the fund (as of 31.03.2021)19,184,010.50 €
Management companyAS LHV Varahaldus
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 1%

Rate of the depository’s charge: 0.0540%

Management fee: 1%

Ongoing charges (inc management fee): 1.40%

Ongoing charges are based on expenses for the last calendar year, ie 2020. Ongoing charges may vary from year to year.

March 2021 – Stock markets largely continued a hearty upward trend

Kristo Oidermaa and Romet Enok, Fund Managers

The stock market indices of developed countries continued their strong upward trend in March. The Euro Stoxx 50 index, which tracks large European companies, rose by as much as 7.9% during the month, with the German, French, Italian and Swedish stock markets being among the strongest. For example, the German stock exchange index DAX rose 8.9% in March, and the return on the Stockholm stock market, measured in euros, was 8.5%.

However, the performance of the Japanese Nikkei index remained modest last month: 0.7% in local currency and -0.1% in euros. The global MSCI Emerging Markets Index was ˗1.7% in local currency. The decline was driven by Asian stock markets, led by China, where the index returned ˗6.1%. In the Baltic countries, the Tallinn stock market index rose the most by 3.3%. The Vilnius and Riga stock markets fell by 0.2% and 5.2%, respectively.

The share of Volkswagen, a car manufacturer in the pension fund’s portfolio, rallied by almost 38% in March. The company has announced a long-term strategy for its electric car business, which is aggressive and offers strong competition to Tesla, which currently dominates the electric car market. It is also possible that minority interests in the subsidiaries manufacturing Porsche and Audi vehicles will be listed, which could further increase Volkswagen’s value.

Stocks of gold mining companies, which have been under pressure in recent months and recovered in March, also brought good returns to the pension fund.

February 2021: investment in a Swedish real estate management company

Kristo Oidermaa and Romet Enok, Fund Managers

In February, the stock markets of developed countries continued to deliver largely positive returns in anticipation of loose monetary policy and new support measures. The Euro Stoxx 50 index, which tracks large European companies, rose by as much as 4.5% during the month, with France, Italy and Spain being the strongest. The German stock market index DAX returned 2.6%, and the Stockholm market rose 2.7%, measured in euros.

The Helsinki stock market index stood at 0.9% in February, while the Japanese Nikkei stock index rose 4.7% in local currency and 3.2% in euros. Among the Baltic countries, the Tallinn stock market had the best return, with an increase of 1.2%. The return on the Riga stock market index was 0.5%, and the Vilnius stock market fell 1.3% during the month.

LHV pension funds were negatively affected by the gold mining companies in the portfolio. For example, the shares of Agnico Eagle Mines and Barrick Gold fell by as much as 19.6% and 16.1%, respectively, during the month. This can be attributed to the rise in real interest rates and the shift in investors’ attention to value stocks and assets that provide inflation protection.

The German car manufacturers Daimler and Volkswagen gave a decent positive return, with stocks rising by 14% and 10.6%, respectively. Although car sales are still poor, they are expected to recover. The Swedish company Coor Service Management was added to the equity portfolio as a new investment. The company offers a wide range of property management services in the Scandinavian countries and earns a stable cash flow.

January 2021: the fourth quarter earnings season began successfully

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%.

In January, several companies in the portfolio of Pension Fund Täiendav published their results for the fourth quarter of the previous year, and among them, medical technology companies stood out positively.

For example, the German company Siemens Healthineers had grown its revenues in all segments and earned additional revenue from sales of coronavirus-related products (e.g. rapid tests). The company’s stock price rose by more than 10% in January.

The Swedish medical device manufacturer Getinge was also able to increase sales, and profitability also improved due to sales of products needed in the production of a coronavirus vaccine. Getinge’s stock price rose more than 11% during the month.

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.

The economy is starting to grow again
Andres Viisemann, Head of LHV Pension Funds

March was another great month for stock markets. The US stock market rose 7.2% in euros and the stocks of European companies rose 6.1% during the month. Asian stock markets were less optimistic: The Chinese stock market lost 3.7% of its value in euros during the month.

LHV Täiendav Pensionifond

Recipient
AS Pensionikeskus

Account
EE547700771002908125 - LHV Pank AS
EE961700017004379157 - Luminor Bank AS
EE141010220263146225 - SEB Pank AS
EE362200221067235244 - Swedbank AS

Explanation
30101119828, EE3600010294, IK:Your ID Code

Amount
Amount invested in euros.

Disbursements

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 pension account or to withdraw the amount in cash.
Income tax of 20% applies to cash withdrawals.