Our goal at INVL Investment Management and Life Insurance Group is to open up the potential of capital markets to our customers and help them save up as much money as possible. To achieve this goal, we implement the investment principles we have called INDEX PLUS.
How these principles are reflected in each investment direction of INVL Life:
INDEX – we invest in index funds and exchange traded funds (ETF) that cover more companies and countries and are widely diversified by geographical/sectoral cross-sections.
Active investment in public, especially developed, efficient global markets pays off less often in the long run, which is why we select the cheapest and most widely diversified index funds in the world and invest there regularly.
Index investment is an investment strategy in which the structure of a selected investment index is repeated. This way of investing allows to reach thousands of companies around the world at the lowest cost and ensure a long-term return on investment, especially for periodic investments.
PLUS – we do Plus actions that help manage risks when markets fluctuate:
Baltic Equity – we invest in companies in the Baltic region. We, one of the largest teams of investment managers in the region, understand our home region, so we are able to identify and realise the ideas here that have a higher return potential. We constantly analyse the shares of the Baltic region, so we can quickly detect when the Baltic stock markets go unnoticed on the horizon of the world’s major investors.
We are not limited to the Baltic countries; we are also looking for unique investment solutions. For example, we are financing the renovation of apartment buildings in Lithuania, which will not only reduce dependence on the consumption of imported natural gas, but will also create new jobs and improve the quality of life for the owners of renovated homes.
Alternatives (asset classes) – we direct part of the investment portfolio to private alternative markets. The group’s parent company Invalda INVL has been investing in private equity markets for 30 years. Our experience and accumulated knowledge as an investment group allows us to successfully identify niches in private markets and take advantage of their potential. Therefore, we are directing part of our investment, which can reach up to 30% in the long run, to private markets. In this way, we can invest in unlisted companies, real estate, and infrastructure and energy facilities such as solar and wind power plants.
Private alternative markets are an attractive investment destination due to:
Higher returns. Private markets are much less liquid than public ones (quick and easy recoup of investments); this insignificant shortcoming in the context of long-term investment is usually offset by higher returns.
More stable asset value growth. All funds that follow indices move according to similar laws in public markets, so their dynamics do not differ much. The niche segments of private alternative markets are also affected by other global events and factors, which help ensure more stable asset value growth.
Bond Single Picks and Active Bond Funds – we actively invest in individual government and corporate bonds. Bonds are considered a safe-haven asset, but investing in bonds from developing countries or riskier companies can yield higher returns. Therefore, by combining bonds with different risks, we create a balanced bond portfolio and aim to improve risk and return targets.
We invest a significant portion of our bond portfolio directly in securities, which helps reduce costs and save more for the customer.
In the bond part, we also invest in opportunities not available in public markets – alternative assets such as private debt.
Tactical bets – we make rare but as accurate as possible tactical decisions, distinguishing a region, sector or level of risk when we see excessive optimism or pessimism, without fear of choosing the opposite path, but always remembering that the there is one long-term direction of investment – that is up.
Index PLUS investing is our chosen solution that combines the benefits of cheap, efficient and globally distributed index investing with a higher risk-return ratio in private alternative markets. Investing in private markets requires a different kind of effort, investment and legal knowledge, experience and professional solutions. We select only teams of investment managers who have already demonstrated a long-standing ability to unleash the potential of private investment. We do this not only to earn higher returns for our customers, but also to diversify our investment portfolio and reduce its volatility.
Responsible investment policy
Working in INVL Investment Management and Life Insurance Group, we believe that environmental, social and governance (ESG) factors are an integral part of the modern investment process. We strive to discover and support the most advanced sustainable businesses and believe they will bring the greatest long-term benefits to our investors.
INVL Responsible Investment Policy is available here.