Rebalance portfolio funds in coronavirus?

MaxiRobriguez

sop12hw said:

Thanks everyone - that is all really helpful to think about. The Baillie Gifford Positive Change fund is the one that has rocketed, if anyone can please explain why?

In short, Tesla. Almost a tenth of the BG Positive Change fund is in Tesla shares and the Tesla share price is up over 100% since you bought it six months ago. 

Top ten breakdown of the fund is below. Together they make up 50% of the fund. Of the top ten only two are negative, and even those losses are small compared to the gains in the other 8.

1) Telsa (8.2% of holding) - +104% since Jan

2) Dexcom (6.4%) +71%

3) Illumina (5.6%) +12%

4) M3 INC (5.6%) +30%

5) ASML (5.3%) +10%

6) TSM (5.1%) -11%

7) Umicore (4.3%) -6%

8) Nibe (3.8%) +26%

9) Alphabet (3.6) +6%

10) CHR Hansen (3.5%) +19%

sop12hw

Thanks! That's what I thought at first. But I wondered whether there was something misleading happening that would result in a crash, and why Tesla would be increasing so rapidly at the moment (hence the question of whether to sell whilst it's higher)

Username999

The third-largest stake in Tesla belongs to Baillie Gifford & Co. This firm is a private partnership that manages $245.3 billion in equity, fixed income, and multi-asset portfolios for clients around the world. Baillie Gifford currently owns nearly 12.1 million shares of Tesla, about 6.5% of all outstanding shares.

MaxiRobriguez

sop12hw said:

Thanks! That's what I thought at first. But I wondered whether there was something misleading happening that would result in a crash, and why Tesla would be increasing so rapidly at the moment (hence the question of whether to sell whilst it's higher)

The fund is quite open ended, not limited to certain sectors, geographies or capitalisation sizes, so you'd think - with them being the experts - that if Tesla shares display bubble characteristics then they may reduce their holding somewhat and essentially do this job for you.

The fund isn't just Tesla though, it's a mix of tech, healthcare, energy, so even if Tesla does tank then if the others do reasonably well then that should be enough to offset any major losses.

In short, no idea if the fund looks positioned well or not. I'd want to go look at each company fundamentals to make a judgement and even then I'd probably be wrong. Judging by past performance (which of course, is no measure of future success!) then the fund typically outperforms the index when prices are going up, and underperforms the index when prices are going down, e.g a higher beta, more volatile. If you're OK with what is a higher risk fund and you've got many years to go before you'd want to crystalise then you might find you want to hang on for the ride. 

AnotherJoe

sop12hw said:

Thanks! That's what I thought at first. But I wondered whether there was something misleading happening that would result in a crash, and why Tesla would be increasing so rapidly at the moment (hence the question of whether to sell whilst it's higher)

IMO Tesla has a long way to run ( easily 2x-3x) but expect some substantial fluctuations along the way.

That fund looks interesting. I'll check it out for future use.

Username999

Cathy Wood of ArK Investment has a 'best' price target of $6,800 which would put Tesla market cap around $1.2 trillion.
Current price is $900 ish.
She gets some stick in the media!
https://www.institutionalinvestor.com/article/b1l6ml0mc0w6zr/Cathie-Wood-Still-Thinks-Tesla-Is-Going-to-6-800-Why

sop12hw

@Username999 thanks - some bedtime reading!

Thanks @MaxiRobriguez that's thoughtful and helpful. I think I'll do nothing and "hang in for the ride"

@AnotherJoe glad it may be of interest to you!