Pension Fund Investments into Estonia Slowing Down
In the last quarter of the year 2019, the volume of pension fund assets invested into Estonia increased by the modest 0.26 percentage points. The total value of funds increased by €217 million, reaching €4.7 billion. The funds have invested €630 million into Estonia, which makes up 13.27% of the total investments. In 2019, the volume of assets invested into Estonia grew by €87 million.
First quarter of 2019 saw a decrease in the total percentage of assets invested into Estonia
The volume of mandatory pension funds’ assets increased by 314 million during the first quarter of the year 2019, exceeding, for the first time, the limit of €4.2 billion. In total €543 million had been invested into Estonia, which was 12.92% of the total assets of pension funds.
In the second quarter of the year 2019, the total percentage of assets invested into Estonia increased to a record high
In the second quarter, the amount of pension fund assets invested into Estonia grew by €72 million, making up 14.13% of the total assets of the funds. As compared to the previous quarter, it meant a growth of 1.21 percentage points. The growth was mainly boosted by increased investments by Swedbank, which exceeded the limit of €70 million. In total, €616 million were invested into Estonia.
Another decrease in the third quarter of 2019
In the third quarter of the year 2019, the volume of pension fund assets invested into Estonia decreased by 1.12 percentage points. Decrease of the total volume of the third quarter was mainly due to the decreased volume of assets invested into Estonia from Swedbank’s pension funds K2 and K3. In total, the volume of Swedbank’s investments into Estonia fell by €43.7 million. During the same period, the volume of LHV’s investments grew by €13.5 million and volume of SEB’s investments by 4.4 million. In total, €590 million were invested into Estonia in the third quarter.
Last quarter shows stabilising of the investments
In the last quarter of the year 2019, the volume of assets invested into Estonia grew by 0.26 percentage points, increasing the volume of pension fund assets invested into Estonia to €630 million. Increase in the fourth quarter comes after the 1.12 percentage point decrease of the third quarter and is an indication of the stabilising of the investments.
Investments of the investment funds into Estonia have remained within the range of 12-14% during the past 7 quarters. From the third quarter of the year 2018, the fast growth of the share has stopped and by today, has only grown by 0.66 percentage points compared to the second quarter of 2018.
Share of pension funds’ assets invested into Estonia by quarters
LHV is still the bank with the highest volume of investments of pension funds’ assets into Estonia – 24.64% of their total investments have been invested into Estonia (growth of 0.03 percentage points as compared to the third quarter). It is followed by Swedbank with 10.09% (growth compared to the third quarter is 0.76 percentage points), SEB 7.17% (no change as compared to the third quarter) and Luminor 3.93% (decrease of 0.09 percentage points as compared to the third quarter).
The Estonian Chamber of Commerce and Industry is observing and analysing the investments of pension funds assets into Estonian economy already since the beginning of the year 2016. Back then, the pension funds had invested only 5.48 percent (€147 million) of their assets into Estonia. The lowest total volume of investments was observed in the first quarter of the year 2017, when it was only 5.01%. The highest total volume of investments was observed in the second quarter of the year 2019, when it was 14.13%. The highest growth numbers were recorded in the fourth quarter of the year 2017, when the growth of investments exceeded two percentage points. The positive trend started after the laws were amended and the state alleviated the investment restrictions of pension funds.