- Estonian pension system
- I pillar
- II pillar
- III pillar
Choosing a fund is the most important decision in the funded pensions system. It must be done carefully and considering all the aspects. A decision should not be made on the basis of emotions, but with great consideration. However, you must start from somewhere. How to make a right fund selection?
When establishing the risk level, you should observe the investment strategy of the funds. This shows where they can invest the assets of the fund. The strategy of the pension funds is divided into four:
In addition to the terms and conditions of a fund, it is well worth to become acquainted with the portfolio of the fund. Only the real portfolio shows how much has been really invested into equity or bonds.
The style of investment shows how the assets of a fund are managed. The styles can be grouped differently, but the most common option is to classify funds as active and passive.
The fund management company plays an important role in choosing a fund. The investor of a pension fund actually chooses people to whom he or she trusts the pension savings. These people invest his or her money and in case of possible mistakes, they have to take the responsibility.