Investing: Rishi Nathany

Last Updated: Mon, Feb 11, 2013 05:46 hrs

What do you think about investing in gold saving schemes of jewellers? I am wary of other products for investing in gold.

There are various gold saving schemes offered by jewellers where they provide an installment scheme to customers to buy gold jewellery, after which they pay the last installment. However, there are various factors to be considered before investing in such schemes. First, these schemes are not regulated. Moreover, they only enable you to buy gold jewellery, where making charges could be high. Additionally, if you want to invest in gold and not jewellery, you could consider investing through a gold exchange-traded fund or e-gold. if you want to go for the gold savings scheme offered by jewellers, make sure you understand the conditions and be sure about the reputation of the jeweller.

Are multi-cap funds better products for investing than equity diversified ones? The former has given higher returns last year

Multi-cap equity funds have fixed limits as to the minimum and maximum percentage that can be invested in small-, mid- and large-caps. Diversified equity funds are allowed to invest across market capitalisations, and thus the fund manager could diversify his holding substantially to manage and reduce volatility risk. In good times, multi-cap funds may outperform diversified equity funds. But on the downside, they could face greater volatility risk, too.

My portfolio comprises mostly a large-cap equity fund, and around 15 per cent in debt funds. I want to take some amount of risk. How about including some sector funds? Which sectors can I invest in now?

From your statement I understand that 85 per cent of your money is invested in a single large-cap equity fund, with the balance in debt funds. It would be better if you diversified your investments across a couple of more funds to reduce concentration risk. As you want to increase risk in your portfolio, you could look at some mid-cap funds as well as sectoral funds. Infrastructure is a beaten sector. So are public-sector banks and metals. However, please be aware that these sectors are going through their own set of problems.

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