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Lithuanian Investment Index

The Lithuanian Investment Index is developed by INVL Asset Management, one of the leading asset management firms in Lithuania. It shows how return on investment in Lithuania’s four main asset classes has evolved since 1996.

Lithuanian Investment Index (1996-2020)

 

The index is calculated on the basis of investment returns for short-term debt securities and money market instruments (deposits), long-term bonds, shares and rental housing (as of 2016 calculated net of expenses), each of which is given equal weight. The index shows how the value of these investments has changed each year.

 

Returns on the Lithuanian Investment Index and its component asset classes are presented through the end of 2020: from the inception of the index in 1996, over 10 years (2011-2020), and in 2020.

 

According to the index, the average annual return on investment in Lithuania during the period of 1996-2020 was 9.6%, while in 2011-2020 it was 4.6%

In 2020, the Lithuanian Investment Index had a 6% gain, led by shares in the country, which earned a return of 14.7%, followed by rental housing with an 8.4% gain.

Inflation in 2020 was 1.1% – a rate the country’s long-term bonds, which earned 0.8%, and deposits, which had a 0% return, failed to surpass.

Long-term return on the Lithuanian Investment Index’s asset classes

 

Stocks brought the biggest return in 2020. Lithuania’s stock market grew an impressive 14.7% last year. Despite fluctuations, over a 5-year period the country’s stocks had the biggest annual return, at 10.9%, while over a 10-year period their return was 7.1% and over the last 20 years it was 11.5%.

 

The return on rental housing in Lithuania in 2020 ranked second among investment classes: the value of which rose 4.1%, or 8.4% if rental income is included. Considering the last 10 years, the average annual growth in the value of Lithuanian rental housing was 7.5%, while over the past 20 years of the index’s compilation the average annual return on rental housing was 12.3%, making it the country’s most profitable asset class.

 

Looking at the performance of safe investments – long-term bonds – in Lithuania, the average annual return was 6.0% in the period of 1996-2020, 1.6% in 2011-2020 and 0.8 in 2020.

 

The return on Lithuanian deposits remained at zero in 2020 for a sixth year in a row, thus the long-term average return on this asset class since 1996 shrank to 4.2%.

The return on Lithuania’s 2nd pillar pension funds

Although last year was full of surprises, the assets of Lithuanian residents held in 2nd pillar pension funds grew 15.7%. The annual return on those assets, meanwhile, was 5.2% and was equal to the long-term average return of 5.2% since the funds began operating in 2004.

 

Individual asset classes yield different returns in different periods, so to reduce risk and sustain investment gains, spreading investments over a variety of areas is recommended.

 

Return by asset class in Lithuania
Asset class* 1996-2020 m. average annual return (%) 2011-2020 m. average annual return (%) 2020 m. return (%)
Housing for rent (costs estimated from 2016 in Lithuania) 7.3 4.7 4.3
Housing price in Lithuania 6.3 2.8 4.1
Shares of Lithuanian companies 9.1 7.1 14.7
Lithuanian short-term debt securities and money market instruments (deposits) 4.2 0.5 0.0
Lithuanian long – term bonds 6.0 1.6 0.8
Lithuanian 2nd pillar pension funds 5.2** 5.2 5.2
Infliation 3.1 1.8 1.1
Lithuanian investment index 9.6 4.6 6

* Housing acquisition and rental returns calculated on the basis of Ober-Haus data. ** Since creation in 2004.

Read more in press release.

The Lithuanian Investment Index is an initiative of INVL Asset Management. Any use of the data herein must identify INVL Asset Management as the source.

Information is provided for information purposes only and cannot be construed as a recommendation, offer or invitation to invest in funds or other financial instruments managed by INVL Asset Management. When investing, you assume the investment risk. Investments can be both profitable and loss-making, you may not obtain financial benefits and you may lose some or even the entire invested amount. Past results of investments do not guarantee future results. When you make an investment decision, assess all the risks associated with investing and the key investor information documents. INVL Asset Management is not responsible for any inaccuracies or changes in this information or for any losses that may arise when investments are based on this information.