LHV Pensionifond XS

Active Management • Conservative Strategy
10%
-10%
10%
10 year net yield
2
1
7
Risk level
31.17%
0%
100%
Invests into Estonia
2992
Fund investors

Suitable if

  • you have less than 3 years left until retirement,
  • you have low risk tolerance,
  • your aim is to preserve your savings and avoid losses.
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Strategy

At least 90% of the Fund's assets are invested in investment grade bonds, money market instruments traded on a regulated market, deposits, shares or other assets of other investment funds investing mainly in the above assets and other assets. The money raised for retirement remains stable. The assets of the Fund are invested in compliance with the rating restrictions imposed on the conservative pension fund by law. The long-term preferred asset class of the fund is low-risk debt instruments.

Performance
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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 31.12.2022

Biggest investments
Luminor 0.792% 03/12/249.66%
Riigi Kinnisvara 1.61% 09/06/276.61%
German Treasury Bill 18/01/20236.19%
Estonia 4.0% 12/10/20325.63%
ZKB Gold ETF4.68%
ALTUMG 1.3% 07/03/254.38%
Elering 0.875% 03/05/20234.15%
Bank Gospodarstwa Krajow 1.375% 01/06/253.88%
France Government 25/02/233.29%
Kojamo 0.875% 28/05/20292.99%

Biggest investments in Estonia

Biggest investments in Estonia
Luminor 0.792% 03/12/249.66%
Riigi Kinnisvara 1.61% 09/06/276.61%
Estonia 4.0% 12/10/20325.63%

Asset Classes

The data is presented as at 31.12.2022.

Information about the fund

Information about the fund
Volume of the fund (as of 31.12.2022)12,109,985.27 €
Management companyLHV Varahaldus
Equity in the fund50,000 units
Rate of the depository’s charge0.0456% (paid by LHV)
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 0%

Management fee: 0,5130%

Success fee: no commission

Ongoing charges (inc management fee): 0,53%

Ongoing charges are based on expenses for the last calendar year, ie 2021. Ongoing charges may vary from year to year.

December 2022: The most difficult year in the bond market in recent decades

Romet Enok, Fund Manager

European bond markets were again in the red in December. The entirety of 2022 was one of the most difficult years in recent decades. The sudden raising of interest rates by central banks caught most market participants by surprise, and the fluctuations were sharp at times.

The more investors sought risk and held longer-dated bonds, the more they lost. In the end, the market average result for the year was –17% in Europe, and the Estonian government bond offered a return of –21%.

In this situation, the LHV XS pension fund ended the year with –3.6%, being the best-performing conservative pension fund in Estonia. LHV’s XS also continues to have the highest returns over the past three, five, ten and 15 years.

The price drop in the market offered us many opportunities during the year to acquire new positions for the fund at an attractive interest rate. Nevertheless, the fund still has a considerable amount of liquidity because the impact of the economic recession has not yet reached companies, and this is where the next place to buy may be.

November 2022: We acquired bonds of a Swedish asset management company

Romet Enok, Fund Manager

In early November, we made a new investment in the long-term bonds of EQT, a large Swedish asset management company. EQT’s business model consists of acquiring, managing, and selling unlisted businesses. As the company involves, on a European scale, rather minor amounts of debt capital, the prices of its securities move more than average in certain situations. Therefore, the price of the bonds issued in spring had fallen by approximately 20% by the beginning of November, and at our purchase price, they offer an annual yield of 5.9%.

The acceleration of inflation has slowed down in Europe, and likewise expectations about how high interest rates could rise have also become more modest. There is still some uncertainty, however, and the deterioration of corporate results should start to come into focus. We have prepared for this, waiting for opportunities to add new investments to the fund.

October 2022: A price drop has made bonds attractive

Romet Enok, Fund Manager

After the recent months’ decline in bond prices, we began making purchases in October.

We participated in the new sale of Estonian government bonds at the beginning of the month, when the government raised money to cover the budget deficit for ten years, at a price of slightly more than 4%. Estonia’s very high international credit rating creates the potential for these bonds to bring the buyer a higher yield than the issue price.

As the month progressed, we also added bonds from European markets to our portfolio. Companies dealing in raw materials have strong financial results and relatively low debt burdens, while bond prices have fallen sharply. While companies paid investors 1 to 2% interest at the beginning of the year, the expected annual return at our purchase level is 5 to 7%.

The rising price of money led to a decline in asset prices
Andres Viisemann, Head of LHV Pension Funds

The year 2022 was pivotal for securities markets. In early January, several of the world’s largest and most important stock indexes were at all-time highs, and global bond markets held more than 10 trillion dollars worth of low-risk bonds that investors were willing to pay to hold.