2017-07-17
Equity pension funds yield highest return for pension accumulation participants
Average return of pension funds operating in Lithuania was positive: over the half-year 2nd pillar pension funds earned, on average, 1.5 per cent, 3rd pillar pension funds – 2.1 per cent. Equity pension funds yielded highest return for pension accumulation participants, while conservative investment pension funds saw a less successful end of half-year, recording negative returns in Q2. At the end of H1 2017, 20 2nd pillar pension funds and 12 3rd pillar pension funds operated in Lithuania, with 1.33 million participants accumulating their pension in them.
‘Government bonds, which until now have satisfied the low risk and investment return appetite of investors, do not earn desired yields, whereas results of conservative investment pension funds operating in Lithuania have become negative. Potential changes in the quantitative easing programme, announced at the very end of Q2, was also a contributing factor, met with sensitive reactions from the currency and bond markets,’ said Dalia Juškevičienė, Principal Specialist at the Long-term Savings and Insurance Product Supervision Division of the Bank of Lithuania.
In H1 2017, the value of investment units of 2nd pillar conservative investment pension funds reduced by, on average, 0.49 per cent, other funds recorded increases in unit values: the unit values of small equity share pension funds rose by 0.55 per cent, medium equity share pension funds – 1.78 per cent, equity pension funds – 3.27 per cent.
Taking into account investment growth and participant contributions and benefits, the increase in the net assets of 2nd pillar pension funds totalled EUR 188.57 million, i.e. 7.6 per cent.
In H1 2017, compared to the end of 2016, the investments units of 3rd pillar bond pension funds grew by an average of 2.1 per cent, of mixed investment pension funds – 1.25 per cent, of pension funds investing in equity – 3.40 per cent in value. The value of net assets managed by these funds increased by 7.83 per cent, to EUR 85.73 million.
Comprehensive data on the performance of 2nd and 3rd pillar pension funds in H1 2017 is published on the Bank of Lithuania website.