Views on the following 2 fund choices I've made please

isayhello

HI, I'd invested in the following 2 funds a short while ago, ICDU and IITU, they've both done well over the years and I thought they would continue to do so but over the past few weeks they're both down and have continued going down.

As a fairly new investor, I was wondering have I missed some obvious clue as to why these funds aren't doing well now or whether they may have a bad outlook. I'm investing for the long term but wanted to check just in case I'd gone down a bad road.

I've invested in global trackers for the bulk of my investment, these 2 funds were smaller investments.

Audaxer

I just looked them up as I hadn't heard of these ETFs. One is almost all US Tech, and that sector has seen some quite big falls this year, and the other one seems concentrated in US Consumer Cyclical, so is also likely to be volatile. Were you not aware that such ETFs may be volatile? A lot of funds and ITs with really good performance records have struggled in the past few weeks. 

sevenhills

isayhello said:

they've both done well over the years and I thought they would continue to do so but over the past few weeks they're both down and have continued going down.

I always look at my shares the day after I have bought them, hoping they have gone up.

But I do know this is obsessive and pointless.

What counts is how they perform over the future months and years.

dunstonh

The tech fund has 90% loss potential.   Both are going to be highly volatile.  Not the sort of funds used by inexperienced investors.

bostonerimus

I've seen my US total stock market fund drop in the last month. This is just normal volatility. Your funds are rather specialized and will be more volatile than the wider market indexes that I use, but they have done far better than my US equity fund over the last few years. So why does this blip worry you? You must be prepared for such drops and far larger ones too.

Thrugelmir

isayhello said:

 I thought they would continue to do so 

Then if the rationale behind your decision to purchase originally no longer holds. Cut your losses. Hanging onto poorly performing investments in the hope of recovery is an all too common trait of inexperienced investors. 

Audaxer

Thrugelmir said:

isayhello said:

 I thought they would continue to do so 

Then if the rationale behind your decision to purchase originally no longer holds. Cut your losses. Hanging onto poorly performing investments in the hope of recovery is an all too common trait of inexperienced investors. 

But I think these particular ETFs are volatile rather than poor performers. Maybe the OP, if inexperienced, shouldn't have gone for them in the first place, but I'm not sure it's a good idea to panic and crystallise his losses.

masonic

isayhello said:

As a fairly new investor,

They seem like very odd choices for a fairly new investor. What is your rationale for biasing towards IT and consumer discretionary sectors?

I can only speculate as to why they have been doing badly, but I'd think consumer discretionary in particular would be expected to underperform when people are worried about cost of living increases. The IT fund has over 40% invested in Apple and Microsoft, trading on a P/E of ~30 and ~35 respectively (this has doubled over several years), so plenty of potential for further losses.

wmb194

ICDU also owns some of the tech companies that have been smashed recently. Valuations of many US firms have been looking more than full for a while now.

isayhello

dunstonh said:

The tech fund has 90% loss potential.   Both are going to be highly volatile.  Not the sort of funds used by inexperienced investors.

What does 90% loss potential mean? thanks for pointing it out, I might have made an unwise choice with the funds. I'd seen them recommended in some financial articles.

isayhello

Audaxer said:

I just looked them up as I hadn't heard of these ETFs. One is almost all US Tech, and that sector has seen some quite big falls this year, and the other one seems concentrated in US Consumer Cyclical, so is also likely to be volatile. Were you not aware that such ETFs may be volatile? A lot of funds and ITs with really good performance records have struggled in the past few weeks. 

I thought the tech one could be not the consumer fund, isn't that more around essential consumer items which should be stable?