At the end of the year, did some additional cash appear in that account? Normally funds distribute dividends in December (among other times), so if you didn't see any cash appear, you're probably "reinvesting dividends". But to the IRS, that's another word for buying more of the fund.
If, within 30 days of buying the fund, you then sell, you have a "wash sale" and can't deduct the loss. (A gain is fine - the IRS is okay with you paying them!)
So you might want to wait 30 days and then sell the fund to avoid the wash sale preventing the loss from being considered real by the IRS.
In general funds don't know you own them. They don't know you bought at $100/share and now at $95/share you're waiting for it to recover. The stock market goes up over the long-term, so you could wait. But that other fund is also growing, so you could switch funds and wait for the new fund to grow as well.
Overall, check for dividends and avoid selling at a loss within 30 days of reinvesting dividends.