I am 47 years old and work in a government-owned company. I have got the following investments: HDFC Top 200 (Rs 4,000 per month since two years), HDFC Equity (Rs 4,000 per month since two years), HDFC Prudence (Rs1,000 per month since two years), HDFC Gold Fund (Rs 2,000 per month which I started recently) and Sundaram BNP Paribas Select Midcap (Rs 4,000 per month since one year). I also had Reliance Vision Fund for which I stopped the systematic investment plan (SIP). I invested Rs 96,000 that is worth Rs 86,000 as of now. Are my investments sound or do you suggest changes? How much corpus can I build for my retirement?

Muizz A.H. Ansari

You are investing Rs 15,000 a month with about half of it going to broadly diversified equity funds. The rest of the portfolio has a small- and mid-cap fund, an equity-oriented balanced fund and a sprinkling of gold on top. This is a well-diversified portfolio with pretty good schemes across the board. Over the last couple of years, you have lost about 10% in the market with this portfolio and that compares favourably with the overall losses that the equity indices have suffered in this time frame. By the time you retire, you can expect to have a corpus between Rs 50 lakh and Rs 60 lakh, depending on the performance of the market and your portfolio (with returns expectations ranging from 10% to 13% annually).

You should however, review your portfolio periodically. Every year, you should look at the performance of the schemes in your portfolio in relation to other schemes in the same category. If over successive years, they are not in the top quartile in terms of performance ranking, you should shift over to a fund that has had a more consistent ranking in the same category. Repeating this exercise for the duration of your portfolio will ensure that it remains current and continues to deliver the performance that you expect from it.

I want to invest Rs 1 lakh in any gold fund. I have zeroed on two options: DSP BlackRock World Gold Fund and HDFC Gold Fund. Which is better and why?

Krunal Sanghvi

The two funds that you have selected are significantly different from each other. HDFC Gold Fund invests in HDFC gold ETF, which in turn invests in the metal itself. The DSP BlackRock World Gold Fund invests in gold mining companies around the world and does not invest in the actual metal.

The performance of the two types of funds are not well cor-related. While the commodity fund has returned at least 40% in the last year, the international mining fund has returned less than 8%. So, if your intention is to invest in gold itself, you should choose HDFC Gold Fund.

Queries and views at mintmoney@livemint.com