Tomorrow (on the 27th of July for those who are reading on a later date) marks the 2 year anniversary of the first transfer of funds to my LHV Kasvukonto account. Technically the investing process itself started on the 2nd of August as the first 400 € got automatically traded for an index fund called SXR8. Back then the price for a single unit of the fund was at around 256 €. As of today that account has 16 678.06 € (out of which profit is +3 220.64 €, or +23.93%) on it and I wanted to dig a little deeper into the history of the account.
I am becoming more convinced about index funds as an investment tool. Currently I am only investing in one (excluding the pension funds) but I would say it is enough for my current portfolio size. I guess the only negative side for this type of investment is that it can be a bit boring. Especially on those days where the numbers go down. In my mind I am comparing this to Mintos where it is still(!) exciting to see the daily interest return notifications from the mobile app.
Let's see some statistics regarding the Kasvukonto account that I have built up.
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| Account Growth |
The graph above shows the account value growing over time. Unfortunately I do not have a track record of profits at these points of time but the growth is noticeably more sudden in the second half of the graph due to doubled contributions and also the profitability snowballing.
So far the management fees have cost me 37.05 € and the transaction fees 134.62 €. This means that in total this account has had 13 629.65 € transferred to it (568 €/month on average). If we remove the related costs the pure profit (without exit fees) comes to 3 048,41 €. There is a 56 cent discrepancy but these numbers should clearly indicate how much the transaction and maintenance fees can impact the profit. Definitely worth holding the picked funds for a long time.
So far the management fees have cost me 37.05 € and the transaction fees 134.62 €. This means that in total this account has had 13 629.65 € transferred to it (568 €/month on average). If we remove the related costs the pure profit (without exit fees) comes to 3 048,41 €. There is a 56 cent discrepancy but these numbers should clearly indicate how much the transaction and maintenance fees can impact the profit. Definitely worth holding the picked funds for a long time.
One milestone I want to aim towards is 30 000 € as beyond this threshold the management fees taken by LHV Bank decrease from 0.02% to 0.01%. Since the maintenance fees consist of 0.02% taken by the bank and 0.07% taken by the ETF, the monthly fees at 30k would end up being 0.08% or 2 € per month (24 € per year) which sounds completely reasonable to me.
It is worth noting that those lucky ones of you who are younger than 26 years can enjoy 0% maintenance fees by the bank (the specific fund fees are still applicable) - a great feature to encourage the younger generation to invest.
You might have noticed a few positive notes in the post already regarding how I feel about this investment product. I like it a lot as it is simple, low effort and so far reliable. I have automated weekly contributions to the account (currently 200 € every week) and will only increase this whenever I see better times to buy more. By picking the right funds and holding them long term, the viability of Kasvukonto seems to be good. The only negative aspect I can think of is that the trades are only performed on Wednesdays and I would sometimes like to use beginning-of-the-week or end-of-the-week lows to put some extra contributions in when the index falls a few %.
Have you tried Kasvukonto? What are your experiences with it? What else would you like to know about my experience? Feel free to share any questions you might have and I will do my best to try to answer them.
