For many years, it has been possible to allocate LD Savings to investment portfolios of one’s own choosing, an option taken up by just under 12 per cent of LD members. The options consist of 10 portfolios, in addition to LD Discretionary, which is LD’s largest investment portfolio. External investment funds manage five of the portfolios, whilst the investment fund Maj Invest manages the Maj Invest Kontra portfolio, which it has now been decided to close.
The closure will take place in April 2019, and until then, members may continue to keep part of their savings in the portfolio. If members leave any of their savings in the portfolio right up until 30 April 2019, LD will ensure that the money is transferred to LD Discretionary. No new portfolio will be opened to replace Maj Invest Kontra.
For you as an LD member, this means:
- You can continue with your current portfolio selection. You do not need to make any changes at this stage due to the closure of Maj Invest Kontra.
- You can still choose to transfer more of your savings into Maj Invest Kontra. The fund selection rules remain the same as before.
- Right up until 25 April 2019, you can choose for yourself where the amount you have in Maj Invest Kontra should be transferred to. You do this by making a portfolio selection, where you allocate the amount to other portfolios.
- If you have not made a portfolio selection by 25 April 2019 to transfer the money from Maj Invest Kontra to another portfolio, we will do it for you. This will take place on 30 April 2019, when we will close Maj Invest Kontra and transfer the funds to LD Discretionary.
Why is Maj Invest Kontra closing down?
The idea behind Maj Invest Kontra is that the portfolio should provide protection against losses during periods of financial market turmoil. The portfolio has indeed done so, but at the same time, its returns during periods of positive market sentiment have not been as good. This has meant that members have often gained better protection by choosing other combinations of portfolios. These could, for example, be bond portfolios, LD Discretionary or other mixed portfolios containing both shares and bonds. Achieving good results with Maj Invest Kontra requires making several portfolio selections over the course of a year and being adept at choosing the right times to invest and withdraw money from the portfolio. However, the vast majority of members make at most one portfolio selection per year. In fact, most maintain their fund allocations for several years.
Members are opting out of Kontra
Maj Invest Kontra was once one of the major portfolios with many members, but in recent years, several members have withdrawn funds from the portfolio to invest in other portfolios. The portfolio currently has approximately 6,200 members and assets of DKK 105 million (figures as at 19 December 2018). This corresponds to 1 per cent of the members and 0.3 per cent of the assets.
