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
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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
Chart 7. Distribution of 2nd
pillar PF investment by currency ..........................................................................................6
Chart 8. Distribution of 2nd
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
Chart 15. Distribution of 3rd
pillar PF investment by currency ....................................................................................... 10
Chart 16. Distribution of 3rd
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
Swedbank Pensija 2 ▲3.1 ▲3.8 ▲4.6
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
Swedbank Pensija 3 ▲4.8 ▲5.3 ▲6.1
Swedbank Pensija 4 ▲6.4 ▲6.2 ▲7.4
Weighted change ▲4.9 ▲5.3 ▲6.0
Equity PFs
Luminor pensija 4 – – –
INVL EXTREMO II 16+ ▲9.5 ▲10.5 ▲11.0
SEB pensija 3 ▲9.0 ▲7.6 ▲7.8
Swedbank Pensija 5 ▲9.0 ▲8.0 ▲9.3
Weighted change ▲9.2 ▲8.8 ▲9.5
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.
Chart 4. Distribution of 2nd
pillar PF market investment by asset class
Chart 5. CIU distribution by type
Chart 6. General distribution of 2nd
pillar PF investment
Chart 7. Distribution of 2nd
pillar PF investment by currency
Chart 8. Distribution of 2nd
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 2 plius 28.44 27,130
Luminor pensija 3 plius 4.66 3,756
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
Thousands EUR millions
Assets (left-hand scale) Participants (right-hand scale)
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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
Weighted change ▲ 3.7 ▲ 5.0 ▲5.6
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
Weighted change ▲ 8.7 ▲ 8.1 ▲8.8
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
pillar PF investment
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.
Chart 12. Distribution of 3rd
pillar PF market investment by asset class
Chart 13. CIU distribution by type
Chart 14. General distribution of 3rd
pillar PF investment
Chart 15. Distribution of 3rd
pillar PF investment bycurrency
Chart 16. Distribution of 3rd
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%
Equity and equity CIUs
45.72%
GS 31.82%
Corporate debt
securities and debt security
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-
31
2017-12-
31
Thousands EUR millions
Assets (left-hand scale) Participants (right-hand scale)
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%
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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
(EUR 82.57 million).
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
(EUR 83.48 million).
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%
Equity and equity CIUs
43.56% GS 6.43%
Corporate debt
securities and debt security
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
Thousands EUR millions
Assets (left-hand scale) Participants (right-hand scale)
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%
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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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