Contents · The market share held by PACs remained unchanged . At the end of 2017, 79% of assets...

The Review provides an analysis of the activities of all pension funds for the accumulation of a portion of the state social

insurance contribution, supplementary voluntary accumulation of pensions, and collective investment undertakings operat-

ing in Lithuania in 2017; the cut-off date for the data presented in the tables and charts below was 31 January 2017, unless

otherwise specified.

In the preparation of the Review, the data of the Bank of Lithuania, pension accumulation companies, management compa-

nies, distributors, etc., published by 31 December 2017, was used.

The Review was prepared by Audrius Šilgalis, Principal Specialist at the Investment Services Supervision Division, phone:

+370 5 268 0524, email: [email protected]; and Dalia Juškevičienė, Principal Specialist at the Long-term Savings and Insur-

ance Product Supervision Division, phone: +370 5 268 0522, email: [email protected].

Contents

I. GENERAL 2ND

PILLAR PF MARKET DATA ..................................................................................................................... 4

II. 2ND

PILLAR PF INVESTING PERFORMANCE ............................................................................................................... 5

III. 2ND

PILLAR PF INVESTMENT PORTFOLIO COMPOSITION ....................................................................................... 6

IV. PARTICIPANTS IN 2ND

PILLAR PFS ............................................................................................................................. 7

V. GENERAL 3RD

PILLAR PF MARKET DATA ................................................................................................................... 8

VI. 3RD

PILLAR PF INVESTING PERFORMANCE .............................................................................................................. 9

VII. PF INVESTMENT PORTFOLIO COMPOSITION ........................................................................................................ 10

VIII. GENERAL CIU MARKET DATA ................................................................................................................................. 11

IX. CIU PARTICIPANTS .................................................................................................................................................... 12

X. CIU ASSETS ................................................................................................................................................................. 13

XI. CIU INVESTING PERFORMANCE .............................................................................................................................. 14

XII. CIU INVESTMENT PORTFOLIO COMPOSITION ...................................................................................................... 15

XIII. UNITS OF FOREIGN CIUS DISTRIBUTED IN LITHUANIA ....................................................................................... 16

XIV. CIUS FOR INFORMED INVESTORS ........................................................................................................................ 17

mailto:[email protected]

mailto:[email protected]

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Tables

Table 1. PF participants and assets managed by investment strategy...........................................................................4

Table 2. Changes in PF unit values and benchmark indices ..........................................................................................5

Table 3. 3rd

pillar PF market data ...................................................................................................................................8

Table 4. Changes in PF unit values and benchmark indices ..........................................................................................9

Table 5. CIU market data ............................................................................................................................................. 11

Table 6. Weighted changes in CIU unit values ............................................................................................................. 14

Table 7. Changes in CIU unit values ............................................................................................................................ 14

Charts

Chart 1. Dynamics in the number and assets of 2nd

pillar PF participants ......................................................................4

Chart 2. Distribution of assets managed by 2nd

pillar PFs by PAC .................................................................................4

Chart 3. Changes in the indices reflecting world market dynamics ................................................................................5

Chart 4. Distribution of 2nd

pillar PF market investment by asset class ..........................................................................6

Chart 5. CIU distribution by type.....................................................................................................................................6

Chart 6. General distribution of 2nd

pillar PF investment.................................................................................................6


pillar PF investment by currency ..........................................................................................6


pillar PF total investment by country ....................................................................................6

Chart 9. Distribution of new participants by PAC in 2017 ..............................................................................................7

Chart 10. Participants who switched PAC in 2017 ........................................................................................................7

Chart 11. Change in the number and assets of 3rd

pillar PF participants .......................................................................8

Chart 12. Distribution of 3rd

pillar PF market investment by asset class ....................................................................... 10

Chart 13. CIU distribution by type ................................................................................................................................. 10

Chart 14. General distribution of 3rd

pillar PF investment ............................................................................................. 10


pillar PF investment by currency ....................................................................................... 10


pillar PF investment by country ......................................................................................... 10

Chart 17. Dynamics in the number and assets of CIU participants .............................................................................. 11

Chart 18. Distribution of CIU assets by type of CIU ...................................................................................................... 11

Chart 19. Distribution of CIU participants by type of CIU ..............................................................................................11

Chart 20. Distribution of CIU participants by MC .......................................................................................................... 12

Chart 21. CIUs with the highest number of participants ............................................................................................... 12

Chart 22. Distribution of CIU assets by MC .................................................................................................................. 13

Chart 23. CIUs with most assets ................................................................................................................................. 13

Chart 24. Distribution of investment of the CIU market by asset class ......................................................................... 15

Chart 25. Distribution of investment in CIU by type ...................................................................................................... 15

Chart 26. General distribution of CIU investment ......................................................................................................... 15

Chart 27. Distribution of CIU investment by currency ................................................................................................... 15

Chart 28. Distribution of total CIU investment by country ............................................................................................. 15

Chart 29. Dynamics in the number and assets of foreign CIU participants .................................................................. 16

Chart 30. Distribution and redemption by CIUs registered in Lithuania and foreign CIUs ........................................... 16

Chart 31. Distribution of foreign CIU assets by distributor ............................................................................................ 16

Chart 32. Distribution of foreign CIU participants by distributor ....................................................................................16

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Abbreviations

2nd

pillar accumulation of a portion of the state social insurance contribution in pension funds managed by

pension accumulation companies

3rd

pillar supplementary voluntary pension accumulation in pension funds managed by pension accumulation

companies

CIU collective investment undertaking

CIUFII collective investment undertaking for informed investors

ECB European Central Bank

GS government securities

ICVC investment company with variable capital

IF investment fund

MC management company

PAC pension accumulation company

PF pension fund

UAB private limited liability company (PLLC)

UAGDPB private limited liability life assurance and pension company

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I. GENERAL 2nd

PILLAR PF MARKET DATA

At the end of 2017, twenty 2nd

pillar PFs operated in Lithuania (see

Table 1). They were managed by five PACs: four MCs and one life

assurance undertaking. MCs managed seventeen 2nd

pillar PFs, the

asset value of which, as of 31 December 2017, amounted to

EUR 2,458.47 million; 1,063.2 million participants accumulated their

pension in them. Life assurance undertakings managed three

2nd

pillar PFs, the asset value of which, as of 31 December 2017,

amounted to EUR 452.63 million; 226.6 thousand participants

accumulated their pension in them.

The PF market saw changes

As of 1 January 2017, deductions from the contributions paid in the

name of the participant were abolished; as a result, the amount of

contributions transferred to PFs increased by EUR 1.7 million.

At the beginning of the year, UAB Swedbank investicijų valdymas

took the management control of Konservatyvaus valdymo Danske

pensija.

UAB DNB investicijų valdymas changed its name to Luminor

investicijų valdymas, UAB; therefore, the names of PFs managed

by this company changed as well. In the middle of the year new PF

Luminor pensija 4 was established.

In November 2017, UAB Swedbank investicijų valdymas transferred

the supplementary voluntary accumulation PF Swedbank papil-

domos pensijos fondas to UAB INVL Asset Management.

Over the year, the assets of 2nd

pillar PFs grew by 17%

In the second half of 2017, assets managed by 2nd

pillar PFs

increased by EUR 235.4 million, or 8.8% – to EUR 2,911.09 million

at the end of December (see Chart 1); their annual growth rate was

17.04% (EUR 423.93 million). The number of participants accumu-

lating their pension in 2nd

pillar PFs grew by 1.16% (14,792 partici-

pants) over the half-year and by 2.64% (33,132 participants) over

the last 12 months. In 2017, PFs were transferred

EUR 170.21 million by Sodra, EUR 84.47 million by participants

who chose to pay additionally, and an additional EUR 83.27 million

by the state. It might be concluded that, owing to their successful

investing activities, PFs earned their participants EUR 85.98 million

(excluding funds paid out to participants who finished participation

in PFs).

The market share held by PACs remained unchanged

At the end of 2017, 79% of assets were concentrated in PFs

managed by three PACs (see Chart 2): 63% of PF assets were

managed by two MCs (UAB Swedbank investicijų valdymas –

37.00%, and UAB SEB investicijų valdymas – 25.98%), and

15.55% – by UAGDPB Aviva Lietuva, which is the third largest PF in terms of the size of assets managed by PFs.

80% of all participants that signed pension accumulation agreements accumulated their pension in PFs managed by three

PACs. Most participants chose PFs managed by UAB Swedbank investicijų valdymas (39.94%), UAB SEB investicijų

valdymas (22.38%), and UAGDPB Aviva Lietuva (17.53%).

As of 31 December 2017, compared to the end of 2015, the Herfindahl-Hirschman index1 slightly declined (by

14.15 points) and stood at 2,526.53 points.

______________________________ 1

The Herfindahl-Hirschman index is one of the most frequently applied concentration indicators. It is calculated as follows: 𝐻𝐻𝐼 = ∑ (𝑥𝑖)2𝑛

𝑖=1 ,

where 𝑥𝑖 is the market share by assets of PAC i, n – the number of PACs. The values of the Herfindahl-Hirschman index vary within the interval of 10,000/n ≤ HHI ≤10,000. The value of the index would be the lowest if all structural components were equal, i.e. every PAC held an equal market share. The value of the index would be the highest if one structural component accounted for 100% of the entire structure, i.e. if only one PAC operated in the market. In practice, the value of the Herfindahl-Hirschman index above 1,800 usually indicates a high concentration.

Table 1. PF participants and assets managed by investment strategy

PF by investment strategy

Number of PFs

Number of participants

Value of assets managed, EUR

millions

Conservative investment

6 96,691 238.77

Small equity share 4 291,437 698.40

Medium equity share

6 651,014 1,503.65

Equity 4 250,142 470.28

Total 20 1,289,284 2,911.09

*By investment strategy, PFs are divided into four risk groups: conserva-tive investment PFs, small equity share PFs (investing up to 30% of funds in equity), medium equity share PFs (30–70%), and equity PFs (70–100%).

Chart 1. Dynamics in the number and assets of 2nd

pillar PF participants

Chart 2. Distribution of assets managed by 2nd

pillar PFs by PAC

37 119 262 489 652

945 1 117 1 182

1 3921 577

1 868 2 121

2 487

2 911 443.6

557.5

780.4

880.9

957.3 997.5

1 035.71 054.4 1 069.3

1 117.0 1 156.6

1 213.8 1 256.01 289.2

0

200

400

600

800

1 000

1 200

1 400

500

1 000

1 500

2 000

2 500

3 000

3 500

2004

-12-

31

2005

-12-

31

2006

-12-

31

2007

-12-

31

2008

-12-

31

2009

-12-

31

2010

-12-

31

2011

-12-

31

2012

-12-

31

2013

-12-

31

2014

-12-

31

2015

-12-

31

2016

-12-

31

2017

-12-

31

Thousands EUR millions

Assets (left-hand scale) Participants (right-hand scale)

Luminor IV 10.53% Swedbank IV

37.00%

INVL AM 10.95%

SEB IV 25.98%

Aviva Lietuva 15.55%

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II. 2nd

PILLAR PF INVESTING PERFORMANCE

Global financial market prices were on an upward climb

2017 was an eventful year: with Donald Trump winning the presiden-

tial election, the US was to go through major reforms; elections were

held in the UK, France and Germany; sanctions against North Korea

were imposed; the Qatar crisis in the Middle East unleashed; terrorist

attacks and natural disasters were spreading fear.

Despite the plethora of events, 2017 was a very successful year for

those investing in equity, particularly in emerging market financial

instruments. Over the past year, Central and Eastern European

economies grew the most – their corporate equity prices went up by

around 25.27%. Albeit somewhat weaker than in 2016, the financial

markets of the Baltic States saw strong price growth, amounting to

17.78%. Russia’s equity market, which shrank by 20.63% in the first

half of 2017, recovered and finished the year with positive results

(see Chart 3).

However, 2017 was not successful for those investing in bonds.

Within the bond index group, nearly all indices, except for European

GS index, tumbled down.

PFs investing in equity recorded increases in unit values

PFs operating in Lithuania saw positive average return: over the year

the value of 2nd

pillar PFs increased, on average, by 4.51%, of

3rd

pillar PFs – by 5.19%. Equity PFs yielded the highest return for

participants.

Last year, returns of 2nd

pillar equity PFs (up to 100% of equity) grew,

on average, by 9.17%, of medium equity share PFs (up to 70% of

equity) – by 4.94%, and of low equity share PFs (up to 30% of equity)

– by 2.19%. The value of conservative investment PF investment

units dropped, on average, by 0.61% over the year. For the first time

since the inception of the 2nd

pillar, the result of these funds has been

negative. This was due to the fact that the yields of government

bonds comprising the assets of the most conservative investment

PFs have been either exclusively low or negative for quite some time.

The largest change in unit value over the year was recorded in the

INVL Extremo II 16+ fund (9.46%).

Over the past 5 years, PF unit values grew by an average of 5.2%

per year, the benchmark indices of the funds – by an average of

5.7% over the same period. Over a 5-year term, the average changes

in PF unit values did not exceed the changes in their benchmark

indices and only several funds managed to overtake the chosen

benchmark index. The latest operating results of 2nd

pillar PFs are

presented on the Bank of Lithuania website.2

_______________________________ 2 http://www.lb.lt/en/pf-performance-indicators.

Chart 3. Changes in the indices reflecting world market dynamics

Table 2. Changes in PF unit values and benchmark indices

Change in unit value over 2017

Average annual

change in unit value

over 5 years

Average annual

change in benchmark index over

5 years

Conservative investment PFs

Aviva Europensija ▼1.7 ▲2.2 ▲1.5

Swedbank Pensija 1 ▲0.0 ▲2.2 ▲2.2

Luminor pensija 1 ▼0.3 ▲1.2 ▲2.2

INVL STABILO II 58+ ▲2.5 ▲2.6 ▲1.6

SEB pensija 1 ▼0.9 ▲0.7 ▲1.5

Swedbank Pensijų išmokų fondas

▼0.0 ▲0.4 ▼0.0

Weighted change ▼0.6 ▲1.2 ▲1.3

Small equity share PFs

Aviva Europensija plius ▲1.5 ▲4.1 ▲3.2

Luminor pensija 2 ▲1.2 ▲3.2 ▲4.0

INVL MEZZO II 53+ ▲5.8 ▲5.2 ▲5.4


Weighted change ▲2.2 ▲3.9 ▲3.9

Medium equity share PFs

Aviva Europensija ekstra ▲3.3 ▲5.9 ▲4.9

Luminor pensija 3 ▲3.4 ▲5.2 ▲5.6

INVL MEDIO II 47+ ▲7.3 ▲7.5 ▲8.7

SEB pensija 2 ▲4.8 ▲4.4 ▲5.1




Equity PFs

Luminor pensija 4 – – –

INVL EXTREMO II 16+ ▲9.5 ▲10.5 ▲11.0

SEB pensija 3 ▲9.0 ▲7.6 ▲7.8



Total weighed change ▲4.5 ▲5.2 ▲5.7

10.24%

25.27%

0.08%

8.89%

6.45%

20.59%

19.78%

0.16%

–6.93%

–6.80%

–4.73%

–15% –- 15% 30%

MSCI Europe

MSCI EFM Europe+CIS (E+C) ex Ru

MSCI Russia

MSCI AC World Index

MSCI USA

MSCI EM

OMX Baltic Benchmark GI

Merrill Lynch Pan-EuropeGovernment Index

Merrill Lynch Global GovernmentBond Index

Merrill Lynch Global InvestmentGrade Market Index

Merrill Lynch Global High Yield

Over 12 months

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III. 2nd

PILLAR PF INVESTMENT PORTFOLIO COMPOSITION

Most of the 2nd

pillar PF funds were invested in CIUs

At the end of 2017, the bulk (56.48%) of 2nd

pillar PF investment consisted

of investment in CIU units or shares (see Chart 4). In terms of value, the

investments amounted to EUR 1.64 billion. The main portion of the funds

invested in CIUs was directed to equity CIUs (see Chart 5). Investment in

them accounted for 45.31% of the total portfolio of 2nd

pillar PFs

(EUR 1.32 billion). The portfolio share of debt security CIUs was more

than five times (8.48%, EUR 0.25 billion). Investment in other CIUs (pri-

vate capital, real estate, commodity, alternative investment, etc.) account-

ed for 2.70% of 2nd

pillar PF assets (EUR 78.56 million).

GS was the second most popular investment. 34.58% of 3

rd pillar PF

assets were invested directly in them (EUR 1.01 billion). The share of

investment in GS boosted by EUR 137.75 million over 2017.

In 2017, direct investment in equity grew the most – by 84.5%: from

EUR 10.94 million to EUR 20.2 million. Direct investment in corporate debt

securities increased by 64.2%: from EUR 62.67 million to

EUR 102.93 million. In terms of nominal value, investments in equity CIUs

increased the most – by EUR 300.9 million or 29.6%, while the share of

cash and deposits in PFs decreased by EUR 128.44 million and

EUR 13.06 million respectively.

Financial derivatives used for hedging and other exposures (amounts

receivable and payable or other) accounted for an insignificant share of PF

investment. The distribution of 2nd

pillar PF investment may be summa-

rised by attributing the funds’ investment in CIUs to respective direct

investment (equity CIUs – to investment in equities, debt security CIUs –

to investment in corporate debt securities) (see Chart 6).

The largest part of 2nd

pillar PF portfolio assets was invested in euro

As seen in Chart 7, as of 31 December 2017, the bulk of PF assets

(91.19%), i.e. EUR 2.65 billion, was invested in euro. PF investment in US

dollar accounted for 7.80% (EUR 226.96 million), and was mainly in equity

CIUs and GS.

Most of funds were invested in Lithuania and the US

The results of the analysis of the distribution of 2nd

pillar PF total invest-

ment by country showed that the countries which attracted the most

investments were Lithuania (23.26%, in December 2016 – 24.10%),

Luxembourg (20.37%) and Ireland (18.53%). The main share of 2nd

pillar

PF funds in Luxembourg and Ireland was invested in CIUs established in

these countries. Therefore, a breakdown of investment in CIUs by the final

country of origin of investment shows that more than 43% of total assets

were invested in Lithuania and the US. Then follow Latvia, Japan and the

UK (see Chart 8). 2nd

pillar PFs in the US tend to indirectly invest in equity

(via CIUs registered in other countries), in Latvia – in GS, in Japan – in

equity. A total of 22.66% of 2nd

pillar PF assets have been invested in

Lithuania, 77.34% – abroad.


pillar PF market investment by asset class

Chart 5. CIU distribution by type

Chart 6. General distribution of 2nd

pillar PF investment


pillar PF investment by currency


pillar PF total investment by country

Equity 0.69%

Cash 4.41%

Deposits 0.45%

Corporate debt

securities 3.54%

GS 34.58%

Other –0.15%

CIU 56.48% Financial

derivatives –0.13%

Equity CIUs 45.31%

Debt security

CIUs 8.48%

Other CIUs 2.70%

Equity and equity CIUs

46.00%

GS 34.58%

Corporate debt

securities and debt security

CIUs 12.01%

Cash and deposits

4.86%

Other CIUs, financial

derivatives, other 2.55%

Other 1.01%

Euro 91.19%

US dollar 7.80%

Lithuania 22.66%

US 20.73%

Latvia 5.22%

Japan 3.68%

UK 3.39%

Poland 3.27%

Germany 3.16%

China 3.01%

France 2.88%

Other 32.3%

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IV. PARTICIPANTS IN 2nd

PILLAR PFs

New participants opted for equity and medium equity share PFs

The number of new participants that joined a pension scheme in 2017

and signed a pension accumulation agreement with a PAC decreased by

11.6 thousand participants and amounted to 41,699. In 2017, 53.2% of

new participants (22,200) opted for equity PFs, 34.7% – for medium

equity share PFs (14,461), 10.9% – for small equity share PFs, and 1.2%

– for conservative investment PFs. Such a choice indicates that, with a

favourable equity market situation, participants are willing to take higher

risk. In 2017, UAB Swedbank investicijų valdymas, UAB SEB investicijų

valdymas, and UAGDPB Aviva Lietuva attracted the most new partici-

pants (those that signed 2nd

pillar pension accumulation agreements for

the first time) – 42.20%, 21.42% and 19.40% respectively (see Chart 9).

2.69% of participants switched their PAC

In 2017, 34,657 participants decided to change their PAC (see Chart 10);

most participants chose funds managed by UAB Swedbank investicijų

valdymas and UAB INVL Asset Management. The majority of participants

terminated their agreements with funds managed by UAB Swedbank

investicijų valdymas and UAB SEB investicijų valdymas.

10,006 participants changed their PF within the same company, switch-

ing mainly to funds with a larger equity share. The main reason for that

was good operating results of funds with a higher risk tolerance. Over the

reporting period, 3.46% of all those who accumulate in 2nd

pillar PFs

(44,663 participants) decided to change their PAC or PF.

Participants are recommended to choose a PF on the basis of the period

remaining until retirement. Young participants are recommended to

accumulate in funds with high risk tolerance, thereby exploiting the

potential for equity market growth. As one ages, risk should be reduced.

It is recommended to switch to a conservative investment PF with 7 years

remaining until retirement so as to preserve funds accumulated for

pension and prevent their market fluctuations-driven depreciation.

3 Prepared on the basis of data presented by Sodra.

Chart 9. Distribution of new participants by PAC in 2017

Chart 10. Participants who switched PAC in 20173

Swedbank IV

42%

DNB IV 7%

INVL AM 11%

SEB IV 21%

Aviva Lietuva

19%

7 105

2 996

9 484

10 643

4 429

–14 314

–273

–5 147

–2 825

–6 250

–5 848

–20 000 –10 000 –- 10 000 20 000

Swedbank IV

Danske CIV

DNB IV

INVL AM

SEB IV

Aviva Lietuva

Switched to another PAC

Came from another PAC

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V. GENERAL 3rd

PILLAR PF MARKET DATA

Assets managed by 3rd

pillar PFs increased

At the end of 2017, twelve supplementary voluntary pension

accumulation funds operated in Lithuania (see Table 3); they

were managed by three MCs.4

In 2017, assets managed by funds grew by 21.45%

(EUR 17.05 million) and amounted to EUR 96.55 million at the

end of December (see Chart 11). Over 2017, the number of

participants accumulating their pension in 3rd

pillar PFs in-

creased by 11.97% (6,176 participants) and amounted to

57,780 in late December.

Concentration in the market was high

As of 31 December 2017, around 76% of assets were concen-

trated in the funds of two PACs: 45.11% of PF assets were

managed by UAB DNB investicijų valdymas and 31.09% – by

UAB SEB investicijų valdymas. The third in terms of the share

of PF assets managed (23.80%) was UAB INVL Asset Man-

agement.

The distribution of participants by PAC was similar to the asset

distribution: funds managed by UAB DNB investicijų valdymas

and UAB SEB investicijų valdymas attracted the most partici-

pants (66.29% and 19.86% respectively), while UAB INVL

Asset Management was the third in terms of the number of

participants (13.85%).

As of 31 December 2017, the Herfindahl-Hirschman index

reached 3,568.01 points, which signals a very high concentra-

tion in the market.

_______________________________ 4 The Supervision Service of the Bank of Lithuania allowed UAB Swedbank investicijų valdymas to transfer to UAB INVL Asset Manage-

ment the rights and obligations arising from the pension accumulation agreements of participants in Swedbank papildomas pensijų fondas,

the PF of the supplementary voluntary accumulation of pensions. The transfer was completed on 3 November 2017.

Table 3. 3rd

pillar PF market data

Name of MC Name of PF Assets,

EUR millions

Participants

UAB SEB investicijų valdymas

SEB Pensija 1 plius 7.36 1,869

SEB Pensija 2 plius 22.66 9,605

UAB Luminor investicijų valdymas

Luminor pensija 1 plius 8.28 5,999



Luminor pensija darbuotojui 1 plius

0.71 499

Luminor pensija darbuotojui 2 plius

1.47 920

UAB INVL Asset Management

INVL III akcijų pensijų fondas 2.55 1,570

INVL STABILO III 58+ 9.61 2,504

INVL Medio III 47+ 4.10 897

INVL Extremo III 16+ 4.85 2,006

Swedbank papildomas pensijos fondas

1.86 1,025

Total 96.55 57,780

Chart 11. Change in the number and assets of 3rd

pillar PF partici-pants

10.6 21.4

30.1 17.6 23.0 28.7 27.2 31.5 37.8

47.6 61.5

79.5

96.6

13

20 22 22 21 24

26 29

34

40

47

52

58

0

10

20

30

40

50

60

-

20

40

60

80

100

120

2005-12-

31

2006-12-

31

2007-12-

31

2008-12-

31

2009-12-

31

2010-12-

31

2011-12-

31

2012-12-

31

2013-12-

31

2014-12-

31

2015-12-

31

2016-12-

31

2017-12-

31



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VI. 3rd

PILLAR PF INVESTING PERFORMANCE

Unit values of nearly all 3rd

pillar PFs grew in

2017

2017 was a success and results of most participants

of 3rd

pillar PFs were positive, with the overall

weighted change in unit value amounting to 5.2%

(see Table 4). The unit values of equity PFs posted

the highest increases (an average of 8.7%); those of

mixed investment PFs rose less – by 3.7%, while

those of bond PFs – by 2.2%.

Over the last 5 years, the unit values across all PFs

rose by an average of 2.6%, to 8.1%, with the unit

values of equity PFs posting the highest increases.

Over this period, the unit value of only one PF

exceeded the benchmark index.

Table 4. Changes in PF unit values and benchmark indices

Name of PF Change in unit value over 2016

Average annual change in unit value over 5

years

Average annual change in benchmark

index over 5 years

Bond PFs

INVL STABILO III 58+ ▲ 5.2 ▲ 3.4 ▲3.6

Luminor pensija 1 plius ▼0.5 - Applicable from

07/10/2013

SEB pensija 1 plius ▲ 1.2 ▲ 1.2 Applicable from

01/01/2013

Weighted change ▲ 2.2 ▲ 2.6 ▲3.6

Mixed investment PFs

Luminor pensija 2 plius ▲ 3.3 ▲ 4.7 ▲5.6

INVL Medio III 47+ ▲ 7.3 ▲ 7.3 Applicable from

01/01/2013

Luminor pensija darbuotojui 1 plius ▲ 1.5 - Applicable from

26/11/2014

Luminor pensija darbuotojui 2 plius ▲ 3.6 - Applicable from

26/11/2014


Equity PFs

Luminor pensija 3 plius ▲ 10.1 ▲ 9.0 ▲10.1

INVL III akcijų pensijų fondas ▲ 10.2 ▲ 8.0 Applicable from

13/05/2013

INVL Extremo III 16+ ▲ 9.4 ▲ 10.2 ▲6.6

SEB pensija 2 plius ▲ 8.4 ▲ 7.4 Applicable from

01/01/2013

Swedbank papildomas pensijos fondas ▲ 5.2 ▲ 7.0 Applicable from

01/01/2013


Total weighed change ▲ 5.2 ▲ 5.8 ▲5.7

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VII. PF INVESTMENT PORTFOLIO COMPOSITION

Most of the funds of 3rd

pillar PFs were invested in CIUs

As of 31 December 2017, the bulk (57.91%) of 3rd


consisted of investment in CIU units (see Chart 12), with their value

amounting to EUR 55.92 million. The largest share of funds invested in

CIUs was allocated to equity CIUs (see Chart 13): investment in them

accounted for 44.54% of the entire 3rd

pillar PF portfolio

(EUR 43.01 million). The remaining share went to debt security CIUs

(11.44%, EUR 11.04 million) and other CIUs (1.93%, EUR 1.87 million).

Assets invested in CIUs boosted by EUR 9.91 million over 2017.

The second most popular investment was GS. 31.82% of 3

rd pillar PF

assets were invested directly in them (EUR 30.73 million). Investment in

GS boosted by EUR 6.66 million over 2017.

At the end of the year, the share of deposits in PF portfolios posted an

increase of EUR 0.23 million, while that of cash contracted to 6.06% of the

assets of 3rd

pillar PFs (EUR 5.85 million) at the end of the period. PFs

invested 2.88% of their assets in corporate debt securities and 1.18% – in

equity; over the year, the share of these asset classes in the total portfolio

remained unchanged. Financial derivatives used for hedging and other

exposures (amounts receivable and payable or other) accounted for an

insignificant share of fund investment, while their share in the total portfolio

decrease more than 4 times over the year.

3rd

pillar PFs invested mainly in equity and equity CIUs

To summarise the distribution of investment as of 31 December 2017,

3rd

pillar PF investment in CIUs was assigned to respective direct invest-

ment (equity CIUs – to investment in equity, debt security CIUs – to in-

vestment in corporate debt securities, other CIUs – to other exposures)

(see Chart 14). The bulk of 3rd

pillar PF investment – 45.72 %

(EUR 44.15 million) – consists of investment in equity and equity CIUs.

Investment in GS accounts for 31.82%, in corporate debt security CIUs and

debt security CIUs –14.42% (EUR 13.92 million). The bulk of funds invest-

ed in GS was invested in the GS of the Republic of Lithuania – 51.20%

(EUR 15.73 million).

Most of 3rd

pillar PF assets were invested in euro

As seen in Chart 15, as of 31 December 2017, most of PF assets – 89.46%

(EUR 88.79 million) were invested in euro. PF investment in US dollar

accounted for 7.45% of 3rd

pillar PF assets; PFs also invested in Romanian

leu (0.2%), pound sterling (0.12%), Croatian kuna (0.09%) and other

currencies (0.19%).

Most of funds were invested in Lithuania and the US

The analysis of the distribution of 3rd

pillar PF total investment by country

showed that the majority of funds were in Luxembourg (29.36%), Lithuania

(25.62%), and Ireland (11.79%). The main share of 3rd

pillar PF funds in

Luxembourg and Ireland was invested in CIUs established in these coun-

tries. Therefore, a breakdown of investment in CIUs by final country of

origin of investment comprising them shows that more than 44% of total

assets were invested in Lithuania (23.25%) and the US (20.33%), followed

by Latvia, France and Poland (see Chart 16). 3rd

pillar PFs in the US mainly

directly invest in equity (via CIUs registered in other countries). In Latvia,

investments were mainly made in GS, in France – in equity and GS. In

Lithuania, about 69.15% of funds were invested in GS; the overall amount

of investments in Lithuania’s GS wass EUR 15.52 million.


pillar PF market investment by asset class

Chart 13. CIU distribution by type

Chart 14. General distribution of 3rd



pillar PF investment bycurrency


pillar PF investment bycountry

Deposits 1.11%

Cash 6.06%

CIU 57.91%

Financial derivatives and other

–0.81%

Equity 1.18%

Corporate debt

securties 2.98%

GS 31.82%

Debt security

CIUs 11.44%

Equity CIUs 44.54%

Other CIUs 1.93%


45.72%

GS 31.82%

Corporate debt


CIUs 14.42%

Deposits 0.24%

Cash 6.06%

Other 1.74%

Euro 91.96%

US dollars 7.45%

Other 0.60%

Lithuania 23.25%

US 20.33%

Latvia 4.04%

France 3.40%

Poland 3.34%

China 3.30%

Japan 3.09%

UK 2.81%

Germany 2.39%

Turkey 2.12%

Other 31.92%

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VIII. GENERAL CIU MARKET DATA

As of 31 December 2017, seven MCs, supervised by the Bank of

Lithuania, established fourteen CIUs (thirteen IFs and one ICVC)5 in

Lithuania: five equity CIUs, five mixed investment CIUs, two real estate

CIUs, one private equity CIU and one debt security CIU. In addition,

three umbrella CIUs, assigned to mixed IFs, had eight sub-funds: four

equity sub-funds, two mixed investment sub-funds and two debt security

sub-funds. In Lithuania, nine special and ten harmonised CIUs were

established. Out of all funds that operated at the end of 2017, one CIU

(real estate fund) did not invest and had no participants.

Sub-funds of umbrella CIUs were seen as individual entities and only

CIUs that had engaged in activities were analysed; therefore, the total

number of analysed CIUs changed (see Table 5).

Information on CIUs registered in Lithuania and newly-established or

wound up CIUs is presented on the Bank of Lithuania website.6

Equity funds continued to be the most popular

Even though assets managed by IFs grew in 2017, the number of

participants, as in previous years, decreased. Over the last 8-year

period, the fall in the number of investors slowed down and the assets

managed by IFs have grown for the first time since 2014. At the end of

2017, the overall value of CIU investment portfolios was

EUR 208.69 million, while the number of CIU participants – 7.06 thou-

sand (see Chart 17).

In terms of assets managed, the real estate funds group continued to be

the largest (see Chart 18), with its assets managed accounting for

30.26% of the market (EUR 63.15 million) and 102 investors investing in

them. The average size of one real estate fund was EUR 31.57 million.

This group of funds was among the smallest (see Chart 19) in terms of

the number of participants (1.44% of all CIU participants).

The largest group of funds in terms of the number of participants was

equity CIUs. It accounted for 83.15% of all participants and 27.82% of

assets. The analysis of the most popular fund groups among retail funds

showed that the average amount of investment per participant in an

equity fund was, on average, EUR 9.88 thousand, in a mixed IF – about

EUR 65.16 thousand, in a debt security fund – EUR 58.30 thousand. It

should be noted that both legal and natural persons were considered as

participants.

_______________________________ 5 This number does not include closed-ended investment company INVL Technology and special closed-ended real estate investment

company INVL Baltic Real Estate, managed by UAB INVL Asset Management. 6 The list of funds is presented on the Bank of Lithuania website at

https://www.lb.lt/investiciniai_fondai?pg=licencijuoti_lietuvoje_investiciniai_fondai_specialieji, latest news – at

http://www.lb.lt/en/supervision-of-financial-market-participants.

Table 5. CIU market data

Type of CIU Number of

CIUs

Num-ber of partic-ipants

Assets, EUR

millions

Average value of

CIU, EUR million

Equity 9 5,873 58.05 6.45

Mixed 4 132 8.60 2.15

Debt securities 2 942 54.92 27.46

Real estate 2 102 63.15 31.57

Private equity 1 14 23.96 23.96

Total 18 7,063 208.69 11.59

Chart 17. Dynamics in the number and assets of CIU participants

Chart 18. Distribution of CIU assets by type of CIU

Chart 19. Distribution of CIU participants by type of CIU

46.51 114.89

240.96

365.32

112.00

129.45

174.17

148.40

185.76

242.69

260.69

226.46 189.46

208.69

2

10

20

41 42

39 39

21 19 18

15 14

7 7

0

5

10

15

20

25

30

35

40

45

-

50

100

150

200

250

300

350

400

2004-12-

31

2005-12-

31

2006-12-

31

2007-12-

31

2008-12-

31

2009-12-

31

2010-12-

31

2011-12-

31

2012-12-

31

2013-12-

31

2014-12-

31

2015-12-

31

2016-12-

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2017-12-

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Equity 27.82%

Mixed 4.12% Debt

securities 26.32%

Real estate 30.26%

Private equity 11.48%

Equity 83.15%

Mixed 1.87%

Debt securities

13.34%

Real estate 1.44%

Private equity 0.20%

https://www.lb.lt/investiciniai_fondai?pg=licencijuoti_lietuvoje_investiciniai_fondai_specialieji

http://www.lb.lt/en/supervision-of-financial-market-participants

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IX. CIU PARTICIPANTS

The number of CIU participants decreased marginally

In 2004–2008, the number of CIU participants7 increased at a steady pace;

however, at the end of 2008 this trend reversed and the number of CIU

participants registered in Lithuania has since been declining on an annual

basis. The year 2017 was no exception: over this period, the number of

participants somewhat contracted (by 348 participants) – from 7,411 to

7,063. The greatest impact stemmed from a decline in the participants of IFs

managed by UAB INVL Asset Management.

As of 31 December 2017, UAB INVL Asset Management had the largest

number of participants in its managed funds. 5,910 participants (see

Chart 20) – 83.68% of all IFs participants – invested in IFs managed by the

company. The second in size was UAB Dovre Forvalting, with 568 partici-

pants – 8.04% of all IF participants. At the end of 2017, 319 participants

invested in a fund or investment company managed by UAB Orion Asset

Management.

Only one fund had more than 1,000 participants

IFs, the membership of which can also include retail investors, vary highly in

terms of the number of participants. The largest fund was INVL be-

sivystančios Europos be Rusijos TOP20 subfondas, with 3,327 participants

(see Chart 21). Then followed INVL Rusijos TOP20 subfondas (988 partici-

pants) and INVL besivystančios Europos obligacijų subfondas (740 partici-

pants). 641 persons invested in INVL Baltijos fondas. As many as 10 out of

18 funds analysed in this Review had less than 100 participants, and only

one fund had more than 1,000 participants. The majority of funds with less

than 100 participants were closed-ended and intended only for qualified

investors.

_______________________________ 7 The number of CIU participants is identified by adding the number of participants in each CIU. The same person that has invested in

different CIUs is, in providing general statistics, considered a separate participant.

Chart 20. Distribution of CIU participants by MC aaa

Chart 21. CIUs with the highest number of participants

INVL AM 83.68%

Orion AM 4.52%

Prudentis 0.61%

Lords LB AM

1.64%

Novus AM 0.74% Dovre

Forvaltning 8.04%

Synergy finance 0.78%

3 327

988

740

641

366

266

214

202

84

53

0 1 000 2 000 3 000 4 000

INVL besivystančios Europos beRusijos TOP20 subfondas

INVL Rusijos TOP20 subfondas

INVL besivystančios Europosobligacijų subfondas

INVL Baltijos fondas

Dovre inside Nordic

IKKB OMX Baltic BenchmarkFund

Dovre baltic Sea

NVL besivystančių pasauliorinkų obligacijų subfondas

Lords LB Baltic Fund III

ZPR Global Equity Fund

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X. CIU ASSETS

In 2017, growth in assets managed by CIUs was driven by success-

ful investing activities

At the end of 2017, seven MCs managed EUR 208.69 million in CIU

assets. Over 2017 the total value of the assets of CIUs in Lithuania

increased by 10.15%. Fund assets increased on account of more sizea-

ble unit redemption (EUR 81.33 million) than distribution


In 2017, the assets of CIUs registered in Lithuania grew by

EUR 19.23 million, the value of units distributed by the CIUs was by

EUR 1.24 million higher than of units redeemed. It might be concluded

that, owing to their successful investing activities, assets managed by

funds grew by EUR 17.99 million in 2017.

CIUs managed by UAB NVL Asset Management managed the bulk

of assets

As seen in Chart 22, the bulk of CIU assets was managed by UAB INVL

Asset Management, which manages equity and debt security CIUs –

41.88% (EUR 87.39 million) of the entire CIU market. UAB Lords LB

Asset Management, which manages real estate and private capital

funds, is second in terms of assets managed; they amount to

EUR 87.11 million (41.74% of the market). UAB Dovre Forvalting,

managing 9.40% of assets (EUR 19.63 million), is third.

In 2017, assets managed by UAB INVL Asset Management posted the

most sizeable increase – EUR 15.88 million. Assets of UAB Dovre

Forvaltning increased by EUR 4.08 million.

As of 31 December 2017, the largest in terms of assets in IFs was Lords

LB Baltic Fund III (see Chart 23), managing EUR 61.03 million; second –

INVL besivystančios Europos obligacijų subfondas, with its assets

managed amounting to EUR 43.69 million, third – Lords LB Private

Equity Fund I, which managed EUR 23.96 million.

The results of the analysis of the activities of CIUs that operated in 2017

and had assets and participants at the end of the year showed that the

assets of eleven CIUs grew, while those of seven CIUs contracted. The

largest increase was recorded in the assets of INVL besivystančios

Europos obligaciju subfondas, managed by INVL Asset Management –

from EUR 27.15 million to EUR 43.69 million, while another six funds

posted an increase in their assets of more than EUR 1 million. Only three

out of eighteen CIUs analysed in this Review managed assets that

amounted to less than EUR 1 million.

Chart 22. Distribution of CIU assets by MC

Chart 23. CIUs with most assets

INVL AM 41.88% Orion AM

1.58% Prudentis

1.70%

Lords LB AM 41.74%

Dovre Forvaltning

9.40% Novus AM

1.59% Synergy Finance 2.10%

61.03

43.69

23.96

11.57

11.24

11.08

10.58

10.31

8.54

2.96

0 20 40 60 80

Lords LB Baltic Fund III

INVL besivystančios Europosobligacijų subfondas

Lords LB Private Equity Fund I

INVL besivystančios Europos beRusijos TOP20 subfondas

NVL besivystančių pasaulio rinkųobligacijų subfondas

Dovre Inside Nordic

INVL Baltijos fondas

INVL Rusijos TOP20 subfondas

Dovre Baltic Sea

Prudentis Global value fund

EUR millions

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XI. CIU INVESTING PERFORMANCE

Growth in financial markets resulted in good CIU investing

performance

Tensions in global financial markets in 2017 affected IF perfor-

mance; however, price increases in 2017 led to increases in the

majority of unit values of CIUs registered in Lithuania that were

distributed to retail investors – the overall weighted increase in

the unit values of all CIUs amounted to 8.4% (see Table 6). The

unit values of equity CIUs rose by 12.5%, of mixed investment

CIUs dropped by 5.3%, of debt security CIUs grew by 5.7%.

Values of the main part of CIU units distributed to retail

investors increased

Over the period of 12 months, the unit values of eight out of

twelve CIUs increased (from 4.9% to 24.2%). The unit value of

Dovre Baltic Sea and INVL Baltijos fondas grew the most (see

Table 7). The unit value of Novus Dynamic Portfolio decreased

the most – by 10.1%.

Attention should be drawn to the fact that the changes in the unit

values of funds were calculated using euro-denominated values;

therefore, the changes in the currency exchange rates of funds

whose currency is not the euro may increase or decrease

performance results.

Table 6. Weighted* changes in CIU unit values

Type of CIU H2 2017 2017

Equity CIUs ▲4.5 ▲12.5

Mixed investment CIUs ▼1.2 ▼5.3

Debt security CIUs ▲2.3 ▲5.7

Total weighted change in all CIUs ▲3.1 ▲8.4

*CIU assets as of 31 December 2016 were used to calculate weighted averages.

Table 7. Changes in CIU unit values*

Name of CIU H2 2017 2017

Equity CIUs

INVL besivystančios Europos be Rusijos TOP20 subfondas

▲1.4 ▲17.0

INVL Rusijos TOP20 subfondas ▲12.4 ▼2.3

OMX Baltic Benchmark Fund ▲7.3 ▲16.8

ZPR Global Equity Fund ▲8.9 ▲9.4

INVL Baltijos Fondas ▲3.1 ▲18.9

Dovre Inside Nordic ▼1.3 ▲5.5

Dovre Baltic Sea ▲7.0 ▲24.2

Mixed investment CIUs

Synergy Finance turto taktinio paskirstymo fondas** ▲3.2 ▼0.3

Novus Dynamic Portfolio ▼5.9 ▼10.1

Novus Balanced Portfolio ▼3.8 ▼8.3

Debt security CIUs

INVL besivystančios Europos obligacijų subfondas ▲1.9 ▲4.9

INVL besivystančių pasaulio rinkų obligacijų subfondas

▲3.7 ▲8.9

** Currency used – other than euro.

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XII. CIU INVESTMENT PORTFOLIO COMPOSITION

Most of CIU funds were invested in corporate debt securities

At the end of 2017, the largest share of CIU investment (39.00%) consisted

of investment in corporate shares (see Chart 24), with their value amount-

ing to EUR 86.08 million at the end of the year. The portfolio share of

investment in corporate shares expanded by EUR 5.37 million over 2017.

The bulk of this investment consisted of real estate funds’ investment in

companies, managing or developing real estate objects, and in corporate

shares in the Baltic States.

Second most popular investment was corporate debt securities; they

amounted to EUR 83.27 million at the end of the year. The share of in-

vestment in corporate debt securities expanded by EUR 1.75 million over

2017. The majority of investments were in debt securities of companies

operating in Lithuania and developing real estate projects. As of 31 De-

cember 2017, 11.73% of fund assets (EUR 25.88 million) were held in

cash.

In 2017, the portfolio share of deposits was contracting and at the end of

the year PFs refrained from depositing their assets. Financial derivatives

and other exposures (amounts receivable, amounts payable) accounted for

–2.72% of the funds’ investment.

At the end of 2017, investment in CIUs stood at EUR 6.04 million. The

biggest share of funds invested in CIUs was allocated to equity CIUs (see

Chart 25); investment in them accounted for 2.31% of the entire CIU

portfolio (EUR 4.82 million). The remaining share of investment in CIUs

went to alternative CIUs (with 0.49% invested in them) and debt security

CIUs – 0.10%. In 2017, investment in CIUs increased somewhat – by

EUR 1.25 million.

The distribution of investment might be summarised by assigning IF in-

vestment in other CIUs to respective direct investment (equity CIUs – to

investment in equity, debt security CIUs – to investment in corporate debt

securities, other CIUs – to financial derivatives and other exposures) (see

Chart 26). The bulk of CIU investment, i.e. 43.56% (EUR 90.90 million),

consisted of investment in equity and equity CIUs. Corporate debt security

CIUs and debt security CIUs accounted for 43.56% of investment


The bulk of CIU assets was invested in euro

As seen in Chart 27, at the end of December 2017, the main share of CIU

assets – 67.10% (EUR 140.04 million) – was invested in euro, while CIU

investment in US dollar accounted for 19.12% of CIU assets

(EUR 39.90 million). The remaining share of CIU funds was invested in

Swedish krona (5.01%), Polish zloty (4.81%), Romanian leu (0.99%) and

other currencies.

The largest share of assets managed by CIUs was invested in Lithua-

nia and Sweden

The results of the analysis of the distribution of total CIU investment by

country (see Chart 28) showed that almost 53% of total assets were

invested in Lithuania (EUR 110.19 million). Then follow Sweden (5.77%),

Turkey (5.19%) and Poland (4.68%). The largest share of CIU investment

in Lithuania consisted of corporate debt securities (48.14%) and equity

(33.82%). A substantial portion of funds was also held in cash (23.48%). In

Sweden, CIUs invest mainly in corporate shares, while in Turkey – in debt

securities and GS. Moreover, the CIUs registered in Lithuania invested in

the United Kingdom, Estonia, Luxembourg and other countries.

Chart 24. Distribution of investment of the CIU market by asset class

Chart 25. Distribution of investment in CIU by type

Chart 26. General distribution of CIU investment

Chart 27. Distribution of CIU investment by currency

Chart 28. Distribution of total CIU investment by country

Deposits 0.00%

Cash 11.73%

Financial derivatives and other

–2.72%

Corporate debt

securities 37.73%

GS 6.08%

Equity 39.00%

CIU 2.74%

Debt security

CIUs 0.10%

Equity CIUs 2.31%

Alternative CIUs 0.49%


43.56% GS 6.43%

Corporate debt


CIUs 40.00%

Deposits 0.00%

Cash 12.40%

Fianancial derivatives and other

–2.39%

Euro 67.10%

US dollar 19.12%

Swedish krona 5.01%

Polish zloty4.81%

Romanian leu

0.99%

Other 2.96%

Lithuania 52.80%

Sweden 5.77%

Turkey 5.19%

Poland 4.68%

US 3.94%

UK 3.55%

Estonia 2.63%

Luxembourg 2.57%

Macedonia 2.04%

Bulgaria 1.79%

Other 15.03%

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XIII. UNITS OF FOREIGN CIUs DISTRIBUTED IN LITHUANIA

Foreign CIU units distributed in Lithuania rose in value

As of 31 December 2017, the units of forty-eight CIUs registered abroad,

with 309 sub-funds, were distributed in Lithuania. The value of the units of

foreign CIUs distributed in Lithuania was EUR 440.16 million (see

Chart 29). Over 2017, the value of assets managed increased by 12.00%

(EUR 47.18 million). The main reason for the increase in the asset value

was the larger value of CIU units distributed than the value of those

redeemed. As seen in Chart 30, the unit value of foreign CIUs redeemed

in 2017 was EUR 26.20 million lower than that of units distributed. On the

back of successful investing activities, in 2017 foreign CIUs earned

EUR 20.98 million to their participants.

As of 31 December 2017, there were 51.11 thousand participants in

foreign CIUs. The number of participants rose by 4.41% over the year.

Compared to the end of 2016, there were 2,158 more participants that

acquired fund units.

The largest value of foreign CIU units distributed was of the clients

of AB SEB bankas and Swedbank, AB

In terms of the value of foreign CIU units distributed, two companies

dominated the market (see Chart 31). At the end of 2017, the value of

foreign fund units distributed by AB SEB bankas amounted to

EUR 251.58 million, and of Swedbank, AB – to EUR 111.59 million.

These two companies, with a large distribution network, accounted for

82.51% of the value of all units of foreign CIUs distributed in Lithuania.

The market share held by other distributors varied between 0.01% and

8.75% in terms of the value of units of foreign CIUs distributed. The

largest distributor in terms of the number of participants was

AB SEB bankas (see Chart 32). 23.30 thousand participants accumulated

funds in foreign funds distributed by it, 10.92 thousand – in

Swedbank, AB, and 15.70 thousand – in Nordea Bank Finland Plc Lithua-

nia branch.

CIUs registered abroad enjoyed greater popularity among Lithuanian

investors

According to company data, the assets of CIU units8 distributed in Lithua-

nia, as of 31 December 2017, amounted to EUR 648.85 million, the

number of participants – to 58,173. In 2017, assets managed by funds

boosted by 11.40% and the number of participants rose by 3.21%. The

asset value of the CIUs registered in Lithuania was EUR 231.47 million

lower than that of foreign CIUs. In addition, Lithuanian CIUs had less

participants (by 44.05 thousand). The distribution of the units of the CIUs

registered in Lithuania in 2016, as well as the assets managed and the

number of investors showed that foreign CIUs were more often chosen by

investors. Retail and professional investors invested in both the units of

CIUs registered in Lithuania and in the units of foreign CIUs distributed in

Lithuania.

_______________________________ 8 The assets of Lithuanian CIUs and the share of the assets of foreign CIUs distributed in Lithuania.

Chart 29. Dynamics in the number and assets of foreign CIU participants

Chart 30. Distribution and redemption of CIUs registered in Lithuania and foreign CIUs

Chart 31. Distribution of foreign CIU assets by distributor

Chart 32. Distribution of foreign CIU participants by distributor

50 178 351 136 248 368 291 318 325 336 371 393 440

3

10

39 38

54

59

54

53 47

44 47 49

51

0

10

20

30

40

50

60

70

-

50

100

150

200

250

300

350

400

450

500

2005-12-

31

2006-12-

31

2007-12-

31

2008-12-

31

2009-12-

31

2010-12-

31

2011-12-

31

2012-12-

31

2013-12-

31

2014-12-

31

2015-12-

31

2016-12-

31

2017-12-

31



56.52

26.54

100.10

82.57

36.35 34.53

73.90 81.33

0

20

40

60

80

100

120

Foreigh CIUs Lithuanian CIUs Foreigh CIUs Lithuanian CIUs

H1 2017 2017

EUR millions

Value of CIU units distributed Value of CIU units redeemed

SEB 57.16%

Danske 1.54%

Swedbank 25.35%

Nordea 6.94%

Citadele 0.26%

Evernord 8.75%

Orion Securities

0.01%

SEB 45.58%

Danske 0.80%

Swedbank 21.36%

Nordea 30.72%

Citadele 0.77%

Evernord 0.75%

Orion Securities

0.02%

17

Rev

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XIV. CIUs FOR INFORMED INVESTORS

New type of CIU in Lithuania

The Law on Collective Investment Undertakings Intended for Informed Investors was passed in June 2013. It lays down

the requirements for CIUs intended for informed investors (CIUFII) and their MCs.

For the purposes of this Law, the following shall be treated as informed investors:

1) professional investors;

2) natural persons without the status of professional investors who have confirmed in writing to the MC of a CIU intended

for professional investors (hereinafter – the MC) or to the investment company that has not designated an MC their status

as that of informed investors and who satisfy at least one of the following requirements: invest or undertake to invest not

less than EUR 125 000 or an equivalent amount in another currency to a CIU intended for informed investors (hereinafter

– a CIU) operating under this Law; or a financial brokerage firm or a credit institution with the right to provide investment

services or a financial adviser undertaking operating under the Law on Markets in Financial Instruments or an MC (or an

equivalent undertaking of another Member State) operating under the Law on Collective Investment Undertakings has

assessed that person’s knowledge and experience in the area of investment and confirms in writing that such a person is

capable of adequately perceiving risk related to investments into CIUs operating under this Law;

3) legal entities without the status of professional investors who have confirmed in writing to the MC or to the investment

company that has not designated an MC their status as that of informed investors and who invest or undertake to invest

not less than EUR 125 000 or an equivalent amount in another currency to a CIU operating under this Law.

The market of CIUFIIs has been growing

The beginning of 2014 saw the start of the establishment of companies managing CIUFIIs and IFs of this type.9 At the

end of 2014, four MCs managed twelve CIUFIIs, with their net assets amounting to EUR 51.51 million. As of 31 Decem-

ber 2015, eight MCs managed twenty-four CIUFIIs (two of them had no assets and participants), while their net assets

stood at EUR 148.76 million. 356 participants had invested in these funds. As of 31 December 2016, eleven MCs man-

aged thirty-nine CIUFIIs (three of them had no assets and participants), while their net assets stood at EUR 372.1 million,

more than doubling over the year. In 2016, the number of participants increased to 540. In the first half of 2017, the

market of CIUFIIs continued to grow. As of 31 December 2017, fifteen MCs managed fifty-five CIUFIIs (nine of them had

no assets and participants), while their net assets10

stood at EUR 492 million. In 2017, the number of participants contin-

ued to grow and at the end of the second half of 2017 reached 734.

Fast market growth shows that investors looking for possibilities to increase their assets and expand their investment

portfolio are interested in funds for informed investors.

It should be noted that IFs intended for professional investors, established in accordance with the Law on Collective

Investment Undertakings, continue operating under the Law on Collective Investment Undertakings Intended for Informed

Investors; consequently, part of funds were restructured into CIUFIIs.

9 Information on companies managing CIUFIIs of this type can be found on the Bank of Lithuania website at

http://old.lb.lt/investiciniai_fondai?pg=iiskis.

10 Annual reports are estimated to be submitted within 6 months.

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