L&G global tech index

muffster

Hello folks,
I started drip feeding into the L&G global tech fund around 18 months ago which has not performed well over this time period. 
Having looked at some of the other usual suspects, vanguard LS, VUSA/VWRL it is a similar theme. The question is should i continue to drip feed into this as the price has dipped or look elsewhere. (into what else i do not know) 
I had intended on 3-5 year time frame, thankfully i don't need to access the funds I've invested so far as it is in the red.
I'd be interested in your opinions.
Thanks. 

dunstonh

I started drip feeding into the L&G global tech fund around 18 months ago which has not performed well over this time period. 

That is tech funds for you.   Great when going up but not bigger falls when they come.

The question is should i continue to drip feed into this as the price has dipped or look elsewhere. (into what else i do not know) 

The fund is a good satellite fund in your portfolio.   Maybe 5% of your total portfolio.    Most wont bother because their portfolio will have tech in it by default.

So, your question needs to be considered in conjunction with your wider portfolio and not looked in isolation.  However, if its your only fund then you should reconsider as you have effectively put all your money into one of the highest risk funds that isnt really designed to be a single hold investment option.

I had intended on 3-5 year time frame, thankfully i don't need to access the funds I've invested so far as it is in the red.

Timescale suggests you shouldnt be holding this fund.    The drops we have seen may take far longer than that to recover.  

Prism

Personally I wouldn't invest in any equity funds with a 3-5 year timescale, assuming you intend on accessing all of the money at that time. 

Dh6

What were your initial reasons for investing in the fund?

steampowered

Your timing was unfortunate in that tech stocks have dropped significantly over the past 12 months, after having performed extremely well over the past 20 years.

If you had been invested for a few years rather than just for 18 months you would have made a lot of money despite the recent drops!

Unfortunately we don't have a crystal ball so nobody knows whether tech will perform well over the next few years.

There is a very good chance that tech stocks might recover a lot of the losses they have made. Possibly in the very near future. After all, tech now dominates the world and is a feature in our daily lives. I can't see that changing. But there is also the possibility of tech stocks dropping further - nobody can tell you with any certainty which way it will go.

The questions you need to think about are:
1) Do you think tech stocks are a better long term bet than the rest of the stock market?
2) Are you happy to continue investing into a high risk fund, or would you prefer a more diversified and therefore lower risk investment? 

dunstonh

There is a very good chance that tech stocks might recover a lot of the losses they have made. Possibly in the very near future. After all, tech now dominates the world and is a feature in our daily lives. I can't see that changing. But there is also the possibility of tech stocks dropping further - nobody can tell you with any certainty which way it will go.

in 2000, they said it could recover quickly and it ended up taking nearly two decades.    We may also not have had all the loss yet.  Tech is down around 50% at present.  it fell 90% 20 years ago.

The fund is a totally inappropriate one for a 3-5 year timescale.  It isnt investing but gambling.

GazzaBloom

Anything can happen with stock prices and further significant drops may come but the top 10 constituents of the L&G Global Tech Index are much larger and more established companies than they were at the time of the 1999/2000 “dot com” boom and bust.

Apple, Microsoft, Alphabet, TSMC, AMSL, Samsung are profitable companies with large revenue streams and are likely all set to continue to be and should weather the potential global recession. Nvidia and Meta look less favourable to me at present.

I would wager that while this index fund is subject to systemic market shocks and sell offs the top 10 holding earnings will make them an attractive buy at some point as prices fall.

Berkshire Hathaway have recent bought $7BN of TSMC, who have committed to invest $40BN in new US based semi conductor manufacturing facilities and Apple are committed to buy the semi conductors from the US plant. This is all part of the US 'onshoring' and fears over the China/Taiwan situation.

Dutch company AMSL make the machines that make the top end semi conductors and effectively have no competition in EUV Lithography.

I invest in the L&G Global Tech Index in my S&S ISA, and while it's a very targeted sector specific fund it is a relatively broad  index.

My investment decisions are very broad based, extremely top down, world view, and in this case, I believe that If we want to reduce the damaging impact we are having on the planet and still exist, then technology is going to be critical in helping the majority of businesses achieve that so at a high view, long term level, a self cleansing rules based index fund holding the top tech companies should do OK.

As suggested above I wouldn't make this fund the mainstay off my pension/investments but a 5-6% satellite holding.

Novice_investor101

I hold this fund in both my LISA & ISA as a satellite. Both wrappers only hold one other fund, a global tracker (L&G International Index tracker & HSBC All World). Both are only equal to 10% in the Tech fund, & that’d be considered high for most people. The values of both wrappers isn’t massive, so in monetary terms the 10% doesn’t equal a huge amount. But as both are long term investments intended for retirement, I’ll be dialling back the exposure as I get older & the values grow.