Which funds should one consider for investing in gold?

1. Tata Digital India Fund: ₹5,000

2. Principal Emerging Blue Chip: ₹5,000

3. ICCI Prudential Long Term Equity Fund Tax Saving: ₹5,000

4. HDFC Developed World Index FoF: ₹2,000

I’m looking to invest for the next three to five years. Am I on the right track, or should I invest in some other funds?

—Name withheld on request

You are investing ₹17,000 a month in roughly this proportion—30% in a thematic fund, 30% in a large- and mid-cap fund, 30% in a tax-saving fund and 10% in an international fund of fund. The last fund is a recently launched NFO (new fund offer) that tracks the MSCI World index. Your investment time-frame is 3-5 years, which makes it a medium-term portfolio. For such a portfolio, it is important to have a moderate risk profile with an allocation to less risky asset classes. Also, it is advisable to avoid thematic funds for this purpose since they require timing in terms of market entry and exit. Considering these factors, you can replace the thematic fund in your portfolio with a conservative hybrid fund such as Canara Robeco Conservative Hybrid Fund. The other funds in your portfolio are fine, although the performance of the NFO will need to be judged with time. Since your allocation to that fund is quite small, you need not worry much.

I’m interested in a gold ETF mutual fund. Please suggest me a good fund. My investment time-frame is eight to 10 years and my risk profile is very high.

—Name withheld on request

If you are investing in an SIP in gold through mutual funds, it would be better to go with a gold fund. If you are investing a lump-sum in gold via funds, you can do it through your brokerage account and an ETF (exchange-traded fund). For either purpose, you can use gold savings fund or ETF from Nippon AMC or SBI AMC.

Srikanth Meenakshi is founder, Primeinvestor.in.