Aggressive funds, those with the highest share weight and who took the biggest investment risks, gave the highest returns.

As of January 2, the highest return for the SEB Index 100 fund was 28.05 percent. Followed by Swedbank K1990-1999 at 27.83 percent, then the LHV Index Fund at 26.79 percent, Future World Equity at 22.72 percent and Luminor A plus gave 21.03 percent return.

The good performance of pension funds was largely due to new rules introduced last year giving them more freedom to invest.

SEB's fund manager Endriko Võrklaev explained it is a characteristic of index funds to take high risks, and this is why the end of the year, when the financial markets rose, was so successful for them.

"The peculiarity of index funds is that they keep the gas low at all times — in good times, in high times, and in slightly worse times, in slightly weaker times. In a situation where all or most of the financial markets went up a lot last year, it is logical that these types of funds will win," he said.

Years in which global stock markets grow by 30 percent occur very rarely. But there may be years where the market is shrinking as much.

Kristjan Tamla, chairman of the management board of Swedbank Investment Funds, says there should be more aggressive fundraising for startups.

"Investing in the stock markets and investing in riskier pension funds is primarily for those with the longest investment horizons," he noted.

As stock markets outperformed bond markets last year, equity funds did well. Luminor, therefore, showed the best annual returns in both conservative, balanced, and progressive funds.

"The idea behind managed funds is to provide investors with a sense of security over economic cycles, and then a more peaceful rise and fall over different cycles, which should ultimately be more profitable than rules-based investment in index funds," said Luminor pensions fund manager Vahur Madisson.

LHV was the worst performer of the year. LHV board member Joel Kukemelk noted that over the last three to four years, LHV has focused on investing in over-the-counter (OTC) OTC assets.

"This does not mean that these investments are automatically lower-risk, but they certainly do not fluctuate up and down with stock exchanges, so they are inherently slightly lower-risk. In the long run, we want to build a good six to eight percent return," said Kukemelk.

Overall, however, the results of last year's pension funds showed that money in funds is not wasted, but growing. 

In total, 45 percent of people's money is in Swedbank funds.

"Absolutely all of Swedbank's pension funds outperformed Estonia's inflation. And those funds where we collect more than 80 percent of our clients also outperformed Estonia's wage growth. So in that sense, it was an exceptionally good year," said Tamla.

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