I don't think they're remotely *NEW*. IIRC, they've been around for at least 20 years, maybe much longer.
The basic problems are:
1) High fees
2) Low diversification
Re: #2 - Most folks using these, IIUC, are techies putting in stock they've received in an IPO or whatnot. So the contents of these funds tend to be not just super-overweighted to tech, but most likely, super-overweighted to "new tech" - whatever has recently IPO'd. In slightly bubbly times, as we are in now, you'd be co-mingling your (presumably risky tech stock) with a bunch of other risky tech stock, albeit from different issuers. Sure, there is SOME diversification benefit, but not as much as you'd hope. And, a few years down the line, you've still got the same issue - badly diversified, overpriced mostly tech stock. You've benefitted a bit, perhaps by the tax deferral allowing what would have been paid in taxes to compound/grow a little, but that's a somewhat meager benefit, I think, although your particulars may affect things.
Generally, I think it's better to bite the bullet and sell, albeit perhaps moderating the pace of sales if that helps you from a tax standpoint.
The basic problems are:
1) High fees
2) Low diversification
Re: #2 - Most folks using these, IIUC, are techies putting in stock they've received in an IPO or whatnot. So the contents of these funds tend to be not just super-overweighted to tech, but most likely, super-overweighted to "new tech" - whatever has recently IPO'd. In slightly bubbly times, as we are in now, you'd be co-mingling your (presumably risky tech stock) with a bunch of other risky tech stock, albeit from different issuers. Sure, there is SOME diversification benefit, but not as much as you'd hope. And, a few years down the line, you've still got the same issue - badly diversified, overpriced mostly tech stock. You've benefitted a bit, perhaps by the tax deferral allowing what would have been paid in taxes to compound/grow a little, but that's a somewhat meager benefit, I think, although your particulars may affect things.
Generally, I think it's better to bite the bullet and sell, albeit perhaps moderating the pace of sales if that helps you from a tax standpoint.
Statistics: Posted by psteinx — Mon Jul 29, 2024 2:42 pm — Replies 10 — Views 1235