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Ramalingam Kalirajan |11136 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Apr 06, 2026

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Rk on Mar 19, 2026Hindi

Hi my friend is 58 yrs of age and have about 75 Lacs to invest in the next 3 to 4 months, his current equity (direct & MF) portfolio is valued at 2.75 Cr and has a significant portion of his corpus in fixed instruments too, while is not working presently he has other income that would take care of his monthly needs and doesn't depend on the equity portion. He is expecting his equity corpus to grow at 12% to 13% in next 3 years to fund an education fee milestone for his son. How would you recommend investing the 75 Lacs, starting with 25 lacs immediately and investing additional 50 Lacs in next 3 months?

Ans: Your friend has already built a strong financial base. Having Rs. 2.75 Cr in equity and additional fixed income support at age 58 shows good discipline. Also, the fact that his monthly needs are covered from other income gives flexibility. This allows the Rs. 75 lakhs to be invested with a clear milestone purpose for his son’s education in 3 years.

Expecting 12% to 13% return from equity in just 3 years is possible, but it needs careful allocation and risk control because the time horizon is short.

» Understand the nature of the 3-year goal

– A 3-year horizon is short for full equity exposure
– Capital protection becomes very important
– Market volatility can affect the milestone if allocation is aggressive
– So strategy should balance growth and stability

Instead of chasing return alone, the focus should be on protecting the education milestone.

» Suggested allocation strategy for the first Rs. 25 lakhs (immediate investment)

Invest the first Rs. 25 lakhs in a staggered but purposeful structure:

– Allocate a portion into large-cap oriented equity funds
– Allocate a portion into flexi-cap funds
– Allocate a portion into balanced advantage funds

Why this mix works:

– Large-cap funds provide stability
– Flexi-cap funds give flexibility across market segments
– Balanced advantage funds reduce downside risk automatically

This improves probability of reaching the education target within 3 years.

» Suggested deployment strategy for the next Rs. 50 lakhs over 3 months

Since markets can move unpredictably in short term:

– Invest through a structured transfer approach over 3 months
– Park temporarily in short-duration debt-oriented mutual funds
– Move gradually into equity-oriented funds

Suggested allocation pattern:

– Add more exposure to multi-cap category funds
– Add exposure to hybrid strategies like balanced advantage
– Add selective mid-cap exposure but keep it controlled

This creates balance between growth and safety.

» Why aggressive mid-cap or small-cap exposure is not suitable here

Many investors get attracted to higher return expectation from mid and small caps.

But in a 3-year window:

– These categories can fall sharply
– Recovery time may extend beyond the milestone period
– Education funding goals need predictability

So exposure must remain limited and controlled.

» Role of hybrid funds for milestone protection

Hybrid strategies play a very important role here.

They help:

– Reduce volatility
– Provide smoother returns
– Protect downside during market corrections
– Maintain equity participation for growth

This is very useful when goal timeline is close.

» Importance of staggered investing instead of lump sum deployment

Even though Rs. 75 lakhs is available now:

– Investing entire amount immediately increases timing risk
– Staggered investing improves entry levels
– It reduces emotional stress during corrections

Deploying Rs. 25 lakhs now and Rs. 50 lakhs across 3 months is a sensible structure already.

» Asset allocation alignment with his existing Rs. 2.75 Cr equity exposure

Since he already holds a large equity corpus:

– Avoid concentration in high-risk segments
– Prefer stability-oriented equity exposure
– Maintain diversification across categories

The new Rs. 75 lakhs should support the milestone instead of increasing volatility.

» Tax efficiency planning before the education milestone withdrawal

Since withdrawal is expected in around 3 years:

– Equity mutual fund gains above Rs. 1.25 lakh attract 12.5% tax
– Short-term gains attract 20% tax

So investments should be planned in such a way that withdrawal timing becomes tax-efficient.

A Certified Financial Planner can help align withdrawal sequence properly.

» Why investing through regular mutual fund route is useful here

When milestone-based investing is involved:

– Fund selection matters
– Risk monitoring matters
– Exit timing matters
– Rebalancing matters

Regular mutual fund route through an MFD guided by a Certified Financial Planner helps:

– Active portfolio supervision
– Goal-based allocation
– Behavioural discipline during volatility
– Timely rebalancing before milestone year

This improves success probability of reaching the education target.

» Finally

Your friend’s financial position is strong and flexible. With the right mix of large-cap, flexi-cap, multi-cap and balanced advantage funds, the Rs. 75 lakhs can support the education milestone effectively within the 3-year window. The key is controlled equity exposure, staggered deployment and milestone-focused allocation instead of return chasing.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/

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