Q1 2018 overview of investment and pension fund sector

In the first quarter of 2018 Trigon Uus Euroopa Fond merged with the Trigon New Europe fund, and LHV Pensionifond Intress Pluss merged with LHV Täiendava Pensionifond. This meant there were 44 public investment and pension funds operating in Estonia at the end of the first quarter. More than half, 32, of the funds operating were pension funds.

 

 

Key Indicators

Q4 2017   Q1 2018
The value of the assets of public funds 4,37 bln € 4,43 bln €
Share of second pillar funds 83,3% 83,4%
Number of unit holders in public funds 800 192 797 198
Number of public funds operating  46 44

 

The value of the assets of public funds grew by 1% in the first quarter over the previous quarter to 4.43 billion euros.

Mandatory pension funds are still by far the largest type of fund, accounting for 83% of the total assets of the fund sector. They are followed by equity funds with 10% of the total assets, public real estate funds with 4%, and voluntary pension funds with 3%.

There were no major changes in the division of the market between fund managers in the first quarter. The largest share of the market continued to be held by AS Swedbank Investeerimisfondid with 40%, which was followed by AS LHV Varahaldus with 25% and SEB Varahaldus with 17%.

The number of owners of fund units fell in the first quarter by 2994 to 797,198 at the end of March. The fall in the number of unit holders occurred mainly at mandatory pension funds.

There have been significant changes in the investment portfolio of mandatory pension funds over the year, as pension funds now prefer to invest directly in equity and bonds rather than through other funds. Direct investment accounted for 66% at the end of the first quarter, while investment through other funds was up in the quarter from 31% to 32% and the share of term deposits and current accounts fell from 4% to 2%.

Main development trends and risks

  • In the first quarter mandatory pension funds continued to prefer to invest directly in equity and bonds, indicating a change in their current investment strategy and more active management by fund managers.
  • Investment in securities, whether equity or bonds, issued in Estonia accounted for 7.8% of the consolidated portfolio of mandatory pension funds, up from 2.3% a year ago.
  • From the first quarter of 2018 there are no longer any public bond funds in the Estonian fund sector.