35% gain from an etf in a month

Thrugelmir

AnotherJoe said:

Stargunner said:

I am invested in INRG - ishares global clean energy and it has gained over 35% in a month which is very unusual for an etf. Anyone know what the reason for this may be and whether it is likely to continue gaining at this pace. 

 As the oil majors become minors, the only way for "alternative*" energy is up. I

That's a very narrow view given what's actually happening at a global level.  More to the industry than just BP and Shell. 

Moe_The_Bartender

I think it depends why you top slice. As a 71 year old in drawdown, I’m top slicing my better performing funds like Fundsmith and moving into wealth preservation trusts (Capital Gearing Trust and Personal Assets Trust). To me, it isn’t a question of moving a well performing fund into a worse one but a case of ensuring that my investments meet my objectives. That said, I think that Fundsmith has pretty good defensive qualities already.

i have about 2% in INRG and am pretty pleased with it.

AnotherJoe

Thrugelmir said:

AnotherJoe said:

Stargunner said:

I am invested in INRG - ishares global clean energy and it has gained over 35% in a month which is very unusual for an etf. Anyone know what the reason for this may be and whether it is likely to continue gaining at this pace. 

 As the oil majors become minors, the only way for "alternative*" energy is up. I

That's a very narrow view given what's actually happening at a global level.  More to the industry than just BP and Shell. 

https://www.france24.com/en/20201008-renewable-player-overtakes-exxonmobil-in-market-value

EthicsGradient

Stargunner said:

I am invested in INRG - ishares global clean energy and it has gained over 35% in a month which is very unusual for an etf. Anyone know what the reason for this may be and whether it is likely to continue gaining at this pace. 

Some think it's a general feeling that Trump has sunk his chances of winning re-election, and renewable energy will do a lot better under Biden and a Democratic Congress:

“Our highest probability is of a Biden win and a Democratic sweep and that keeps increasing,” said John Briggs, Americas head of strategy at NatWest Markets. “We had some client pushback on that idea but after the debate that turned around quite a bit.”

Shares of alternative energy companies, which analysts expect to prosper from policies under a Biden administration, have climbed sharply since the debate.

In currency markets, bets on post-election volatility are waning - evidence of investors positioning for a strong win for the Democrat. In Treasury markets, a bout of selling on expectations of a hefty Biden-led stimulus package has helped send yields to their highest levels in months.

...

A basket of stocks tracked by JPMorgan Chase & Co, which includes green technology and trade-linked companies that would likely benefit from Democratic policies, has outperformed a basket of companies that could be hurt by a Biden presidency by about 10% between early September and Wednesday, according to a Reuters analysis.

Per Stirling’s Phipps said his portfolio’s biggest winners had been in the alternative energy space. “Every time Biden’s poll numbers go up, those investments go up,” he said.

https://www.reuters.com/article/us-usa-markets-biden-analysis/investors-bets-on-a-democratic-sweep-grow-after-biden-debate-performance-idUSKBN26U0DC

AnotherJoe

Moe_The_Bartender said:

I think it depends why you top slice. As a 71 year old in drawdown, I’m top slicing my better performing funds like Fundsmith and moving into wealth preservation trusts (Capital Gearing Trust and Personal Assets Trust). To me, it isn’t a question of moving a well performing fund into a worse one but a case of ensuring that my investments meet my objectives. That said, I think that Fundsmith has pretty good defensive qualities already.

i have about 2% in INRG and am pretty pleased with it.

Fair enough but that's not what I thought top slicing was.  Maybe I'm wrong. I thought it was simply reducing something simply because it's gone up a lot recently. 

I recently sold a lot of Apple, first because it was making up a ridiculous amount of my portfolio and second because I wanted the money for something. Whether that be a house  (my case) or different investment objectives (yours and mine) I'd call that more rebalancing. Note the OP just started out saying "it's gone up a lot so shall I sell some?" So my answers / understanding of top slicing is in that context. 

( and I say no because it's going to go up a lot more) 

Audaxer

AnotherJoe said:

Moe_The_Bartender said:

I think it depends why you top slice. As a 71 year old in drawdown, I’m top slicing my better performing funds like Fundsmith and moving into wealth preservation trusts (Capital Gearing Trust and Personal Assets Trust). To me, it isn’t a question of moving a well performing fund into a worse one but a case of ensuring that my investments meet my objectives. That said, I think that Fundsmith has pretty good defensive qualities already.

i have about 2% in INRG and am pretty pleased with it.

Fair enough but that's not what I thought top slicing was.  Maybe I'm wrong. I thought it was simply reducing something simply because it's gone up a lot recently. 

I recently sold a lot of Apple, first because it was making up a ridiculous amount of my portfolio and second because I wanted the money for something. Whether that be a house  (my case) or different investment objectives (yours and mine) I'd call that more rebalancing. Note the OP just started out saying "it's gone up a lot so shall I sell some?" So my answers / understanding of top slicing is in that context. 

( and I say no because it's going to go up a lot more) 

How do you know it's going to go up a lot more? As dunstonh said above "Anything that goes up by that amount in a month can go down by that amount in a month."

I think it would make sense in a lot of cases to take the profit either for spending now or at a later date, or moving the profit to a less volatile investment like a wealth preservation fund. 

[Deleted User]

AnotherJoe said:

Moe_The_Bartender said:

I think it depends why you top slice. As a 71 year old in drawdown, I’m top slicing my better performing funds like Fundsmith and moving into wealth preservation trusts (Capital Gearing Trust and Personal Assets Trust). To me, it isn’t a question of moving a well performing fund into a worse one but a case of ensuring that my investments meet my objectives. That said, I think that Fundsmith has pretty good defensive qualities already.

i have about 2% in INRG and am pretty pleased with it.

Fair enough but that's not what I thought top slicing was.  Maybe I'm wrong. I thought it was simply reducing something simply because it's gone up a lot recently. 

That is my understanding of top-slicing and rebalancing too: selling winners to subsidise losers; on the principle that there will be some reversion towards the mean. 
It is a strategy that appeals to a sense of safety, as EthicsGradient confirms.
But it comes at a price - it slows accumulation of wealth in a rising market. If you have undertaken a "risk profile" or simply entrusted your finances to a fund manager, "rebalancing" has helped the industry manage and meet your expectations. Unfortunately, it will likely have cost you a lot of money as well.

Thrugelmir

EthicsGradient said:

Stargunner said:

I am invested in INRG - ishares global clean energy and it has gained over 35% in a month which is very unusual for an etf. Anyone know what the reason for this may be and whether it is likely to continue gaining at this pace. 

Some think it's a general feeling that Trump has sunk his chances of winning re-election, and renewable energy will do a lot better under Biden and a Democratic Congress:

“Our highest probability is of a Biden win and a Democratic sweep and that keeps increasing,” said John Briggs, Americas head of strategy at NatWest Markets. “We had some client pushback on that idea but after the debate that turned around quite a bit.”

Shares of alternative energy companies, which analysts expect to prosper from policies under a Biden administration, have climbed sharply since the debate.

In currency markets, bets on post-election volatility are waning - evidence of investors positioning for a strong win for the Democrat. In Treasury markets, a bout of selling on expectations of a hefty Biden-led stimulus package has helped send yields to their highest levels in months.

...

A basket of stocks tracked by JPMorgan Chase & Co, which includes green technology and trade-linked companies that would likely benefit from Democratic policies, has outperformed a basket of companies that could be hurt by a Biden presidency by about 10% between early September and Wednesday, according to a Reuters analysis.

Per Stirling’s Phipps said his portfolio’s biggest winners had been in the alternative energy space. “Every time Biden’s poll numbers go up, those investments go up,” he said.

https://www.reuters.com/article/us-usa-markets-biden-analysis/investors-bets-on-a-democratic-sweep-grow-after-biden-debate-performance-idUSKBN26U0DC

The fund has a global remit doesn't just hold US companies.  Cost of producing and generating renewable electricity is falling. 

Stargunner

Audaxer said

I think it would make sense in a lot of cases to take the profit either for spending now or at a later date, or moving the profit to a less volatile investment like a wealth preservation fund. 

I will just keep it for now and enjoy the ride. I certainly wouldn’t want to sell some of it to put the money in a wealth preservation fund when there are s good choice of actively managed growth funds/IT’s that would give me a much better return.

Moe_The_Bartender

Stargunner said:

Audaxer said

I think it would make sense in a lot of cases to take the profit either for spending now or at a later date, or moving the profit to a less volatile investment like a wealth preservation fund. 

I will just keep it for now and enjoy the ride. I certainly wouldn’t want to sell some of it to put the money in a wealth preservation fund when there are s good choice of actively managed growth funds/IT’s that would give me a much better return.

Or a greater loss. This is the point of wealth preservation funds. It depends where you are on your investment journey and if you have reached the point where you have enough, you don’t need to take unnecessary risks.