Lower fees for Tuleva funds!

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Tuleva investors will benefit from reduced fees once again! At Tuleva, we believe that the more investors join our ranks, the less everyone should pay in fees. This core principle drives our operations. Thanks to the remarkable growth in our assets, which have increased by 160 million euros since the beginning of the year, we are pleased to announce another round of fee reductions for our funds.

From 1 October, fees across all our funds have dropped by an additional 0.02 percentage points. As a result, the fees for the Tuleva Third Pillar Pension Fund now stand at just 0.33%.

For second pillar investors, the Tuleva World Stocks Pension Fund fees are 0.35%, and 0.39% in the Tuleva World Bonds Pension Fund.

For Tuleva members investing with us is even more advantageous than these fees suggest. A unique feature of Tuleva is that a portion of our fees are returned to our members. Each Tuleva member will receive 0.05% of the value of the assets accumulated in Tuleva’s second and third pillars as a membership bonus every year.

Tuleva stands out as the fund management company with the most competitive average fees in Estonia (1). The reason behind this is simple – we only offer good, low cost funds, while our competitors provide a mix of high-fee funds alongside more affordable options.

Tuleva stands out as the fund management company with the most competitive average fees in Estonia (1). The reason behind this is simple – we only offer good, low cost funds, while our competitors provide a mix of high-fee funds alongside more affordable options.

Source: Ministry of Finance pensions statistics review 2022

It is crucial to note that our fees are continuously decreasing at Tuleva. The current fees for pension funds in Estonia are unfortunately on the rise. The most significant impact can be seen in the fees of the two largest second pillar funds. Over the past two years, fees for LHV L have surged from 1.14% to 1.95%, while fees for the Swedbank 1970-79 Fund have increased from 0.65% to 0.77%.

Why do fees matter so much?

A simple rule applies when it comes to investment funds: the less you pay in fees, the more you retain from the returns generated by your assets (1). This is why reducing fees is the most effective way to improve your return on investment. While the fees for pension funds may appear small as percentages, higher fees can significantly erode your savings over time – find out how. 

Use our fee calculator to compare second pillar funds in Estonia.

Why are we lowering our fees now?

At Tuleva, our approach is straightforward – the more investors we attract, the lower the investment costs for all members. We review our fees regularly.

While the volumes managed by banks’ fund management divisions have declined due to people exiting the second pillar, Tuleva continues to experience robust growth. Our funds now exceed 550 million euros in total, with over 65,000 people already investing in Tuleva’s second and third pillars.

The timing of this reduction in costs is primarily due to lower custodial fees. Pension funds are required to entrust their assets to a custodian bank that holds the fund’s securities and executes transactions on its behalf. This ensures that investors’ assets are consistently kept separate from those of the fund management company. Deposits flow directly to the custodian bank and, from there, to the global securities markets. While this practice safeguards assets, it also involves fees charged by custodian banks. Thanks to our significant growth, we’ve been able to negotiate a reduction in these fees with our custodian bank.We are actively pursuing further fee reductions. There’s no need for external pressure from the state or competitors to prompt Tuleva to lower its fees. What motivates us is that Tuleva’s owners are the same people who grow their assets in our pension funds. Keeping costs under control benefits our members and assures other Tuleva customers that investing in our funds will become even more economical

What sets Tuleva apart?

Tuleva operates with a distinct mission: to help people build their future wealth with confidence. This is achieved by regularly setting aside funds and steadily growing their stake in the world’s largest companies. To fulfil this mission, we adhere to several fundamental principles:

Only good funds. At Tuleva, we do not hide good options among the bad ones. It is great that, following Tuleva’s lead, banks have begun to introduce index funds with lower fees to their product range. Unfortunately, these banks still have a vested interest in keeping the majority of their customers in high-fee legacy funds. At Tuleva, no customer pays more than 0.39% in fees.

For example, our largest fund, Tuleva World Stocks Pension Fund, charges a mere 0.35% in fees. By way of comparison, Estonia’s largest pension fund, LHV L, imposes fees of 1.95%, nearly five times higher.

Growth is important. We understand that the more significant our fund volume becomes, the lower the costs are for all our investors.

During our first years of operation, we learned that it is not enough to merely introduce good funds to Estonia. To ensure that more and more investors discover modern, low-fee index funds, we must help cut through the information noise and advertising clutter. As more people save wisely and consistently with our assistance, Estonia benefits as a whole.

Low fees. As previously mentioned, the cost of investing with Tuleva continues to decrease. While this does not imply that you cannot find funds with lower fees elsewhere, Tuleva believes in maintaining fairness by not subsidising the costs of smaller funds at the expense of other clients for marketing purposes.

Why do we personally invest with Tuleva, and why do we recommend it to our loved ones? By choosing to save with us, you can be confident that your funds are among the most affordable in Estonia and have the assurance that fees will continue to decrease in the future. Your returns will closely track global economic growth, and you can rest assured that Tuleva employees will never seek to sell our customers poor and costly investment products.

What can you do today to benefit more from your pension pillars? 
  • Review your pension funds and make sure you are investing in both the second and third pillars with a low-fee index fund, maintaining annual fees of less than 0.5%. As a member, you will earn a membership bonus on your pension pillars with Tuleva.
  • Check your third pillar contributions before the end of the year. If they are below 15% of your annual gross income (and also less than 6,000 euros), consider investing more to take full advantage of the tax incentive and receive a higher income tax refund in the spring.

By taking these steps, you will have a very good chance of accumulating substantial wealth for your future through your second and third pillars. 

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  1. Ministry of Finance pension statistics review 2022, https://www.pensionikeskus.ee/statistika/ii-sammas/rahandusministeeriumi-statistika/
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