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 31.12.2022.

Biggest investments
German Treasury Bill 22/02/2310.80%
France Government 25/02/238.79%
EfTEN Kinnisvarafond3.90%
ZKB Gold ETF3.82%
iShares Gold Producers UCITS ETF3.32%
German Treasury Bill 18/01/20233.01%
BNP Paribas 2.5% 31/03/20322.90%
Lyxor EURO STOXX Banks DR UCITS2.52%
BIGBANK 7.5% 16/05/20322.43%
East Capital Baltic Property Fund III2.33%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond3.90%
BIGBANK 7.5% 16/05/20322.43%
East Capital Baltic Property Fund III2.33%

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)24,933,395.79 €
Management companyLHV Varahaldus
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 1%

Rate of the depository’s charge: 0.0444%

Management fee: 1%

Ongoing charges (inc management fee): 1.46%

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

December 2022: We reduced equity positions in the energy and banking sectors

Kristo Oidermaa and Romet Enok, Fund Managers

In December, world stock markets mostly fell. Measured in euros, the MSCI World index fell by 7.6%, the US S&P 500 index fell by 9.4%, and the Nasdaq Composite index, which tracks the US technology sector, fell as much as 12.1%. The Japanese Nikkei index fell 4.4%, the European Euro Stoxx 50 index 4.3% and the MSCI Emerging Markets index 5.3%, measured in euros. The Baltic stock markets stood out last month: the Tallinn, Riga, and Vilnius stock markets rose by 0.4%, 3.4% and 0.1%, respectively.

Our investments in listed stocks depreciated at the end of the year, driven by profit-taking in positions related to the energy sector. Stock investments related to precious metals escaped the general decline of the markets.

At the beginning of the month, we reduced the fund’s equity positions in the US energy sector and European banks, which had offered good returns in the short term. With these sales, we increased the buffer that can be used for new investments in the near future.

European bond markets remained clearly in the red in December, showing once again the value of financing Estonian companies, both in developing the local economy and in achieving a higher return on pension assets.

The year 2022 was particularly difficult for the public bond markets: for example, the European market offered an average return of –17%, and Estonian government bonds fell as much as 21%. Fearing risks, we have avoided public bonds in recent years, but the new year may start offering new opportunities in this area.

November 2022: Stock markets continue to recover

Kristo Oidermaa and Romet Enok, Fund Managers

In November, the world’s stock markets continued to rise, and the euro strengthened significantly. Measured in euros, the MSCI World index rose by 2.7% and the US S&P 500 index by 1%, but the Nasdaq Composite index, which tracks the US technology sector, remained almost at the same level as in October, measured in euros. Japan’s Nikkei index rose by 3.6% in euros in November.

We experienced strong growth in European stock exchanges in November, when the Euro Stoxx 50 index rose by 9.7%. The same trend persisted in emerging markets: the MSCI Emerging Markets index rose by 9.9% measured in euros. While trends in the Baltic stock markets are often mixed, this month the Tallinn, Riga, and Vilnius markets moved in the same direction and rose by 5.3%, 5% and 4.7% respectively.

The local private equity company BaltCap announced that the BaltCap Latvia Venture Capital Fund, which they manage, was selling the digital medical services provider Blue Bridge Technologies. The company was founded in 2007 and BaltCap invested in it six years later. Blue Bridge Technologies was sold in its entirety to the software investor Everfield.

November was positive for the fund’s stock investments. The value of copper-related stocks rose the most, as they went up 20% as a response to the expected change in China’s Covid-19 policy. Among other investments, the share prices of gold mining companies increased to a greater extent. We saw a decline in energy stocks, where we also locked in gains from this year’s rise during the month.

The fund’s key positions on the stock markets remain primarily in investments related to mineral resources. In November, we reduced our funds’ equity investments in US energy companies to create liquidity for new purchases. We look forward to putting money back into better priced stocks during a more nervous market phase.

October 2022: Stock markets recovered from the decline

Kristo Oidermaa and Romet Enok, Fund Managers

In October, world markets recovered. The MSCI World Index, the US S&P 500, the Japanese Nikkei Index, and the European Euro Stoxx 50 rose 6.2%, 6.9%, 2.5% and 9.1% in euros, respectively. However, emerging markets moved in the opposite direction: the MSCI Emerging Markets index fell by 4.1% in October. Compared to world stock markets, the Baltic stock exchanges remained relatively neutral: during the month, the Tallinn and Riga stock exchanges fell by 0.6% and 0.4%, respectively, and the Vilnius stock exchange rose by 1%.

In the same month, encouraging quarterly results supported the fund’s listed equity investments. Among European investments, bank shares saw the most success, as the financial results of this sector are improved by rising interest income. Among US investments, shares of Valaris and Freeport McMoran, related to mineral resources, rose the most. Most of the fund’s share positions are related to mineral resources and companies that process them, which in many cases are earning record profits in the context of high commodity prices.

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.

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

After reaching the age of 55 (if you started making Pillar III contributions before 2021), but not before five years have elapsed from the initial investment, the income tax on disbursements is 10%. If you have joined the third pillar before 2021 and want to take out what you have collected before the age of 55, the income tax is 20%. Those who have joined the third pillar from 2021 can withdraw money from the third pillar at a more favorable income tax rate (10%) if there is less than 5 years until retirement age.

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.