Should I invest in sovereign gold bonds?

I am 37 years old. I work in a BPO. My monthly salary is approximately Rs 45,000. I have been investing in the following schemes:
DSP BlackRock T.I.G.E.R. Fund – Regular (G): Rs 1,000 per month (since Sept 2008)
HDFC Top 200 Fund – Regular (G): Rs 2,000 per month (since Sept 2012)
The total market value of my investment is approximately Rs 4,25,000. I am planning to increase my SIPs with an additional amount of Rs 5,000 (total Rs 8,000 per month). Should I continue to invest in these two funds? How much should I invest in each of them? Which other equity schemes will be better for me to invest via SIPs? I have a moderate to high risk profile. I have a long-term investment plan for my child's education and marriage and my retirement. I also have savings in my PPF account. I pay yearly premiums for my LIC and healthcare policies. Should I invest some amount (Rs 10,000 to Rs 15,000) in Sovereign Gold Bonds Scheme issued by the central government? Please advise.

--Umesh Bapat

Suresh Sadagopan, Founder, Ladder7 Financial Advisories, responds:


You should stop your SIPs in both these funds and pick other funds to invest.

I have listed a few schemes:

DSP BlackRock Focus 25 Fund
Birla Sun Life Frontline Equity Fund
Franklin India Prima Plus Fund
HDFC Balanced Fund
Franklin India High Growth Companies Fund
Quantum Long Term Equity Fund

Start investing via SIPs in any two of these funds. The amount accumulated through your previous SIPs can too be shifted to some of these funds. Keep in mind the capital gains and exit loads.

I would suggest you to not to invest in Sovereign Gold Bonds Scheme as their yields are expected to be low. Stick with good equity mutual funds. If necessary, you may invest in some debt products as well.