Mutual Fund Moves to Make in Your 30s, 40s, 50s and Beyond

Mutual fund strategy if you’re in your 30s

Your 30s are a time when your career is growing, along with your responsibilities–getting married, buying a home, saving up for your children’s education. This is an important time to start investing with clear goals. With time on your side, starting early gives you the opportunity to enjoy the benefits of compounding to grow your wealth.

Focus more on equity funds for long-term goals. You can invest around 70% in large-cap, flexi-cap, or mid-cap funds through SIPs, based on your risk tolerance. For short or medium-term goals like a car or holiday, invest 20–30% in debt funds to keep your portfolio balanced.

While investing, match each investment to a goal — building an emergency fund, down payment for a house, or your child’s school fees. Use short-duration debt funds for goals within 1–3 years, and hybrid funds for goals in 3–5 years. As your income increases, try to gradually raise your SIP amount too. It’s an easy and effective way to grow your wealth over time.

Mutual fund strategy if you’re in your 40s

In your 40s, your financial priorities begin to shift. Your career stabilises and family responsibilities grow. With major expenses, like your children’s education ahead, it is now time to lower your risk.

Reduce your equity exposure to around 60% and shift the remainder into hybrid (balanced) funds that blend equity and debt. It offers a sense of security while still helping your money grow.

Review your portfolio and consider exiting high-risk funds such as sectoral or small- and mid-cap funds. Instead, add more diversified equity funds, including ELSS options that offer both growth and tax savings. Since asset allocation becomes key at this stage, having a well-balanced mix of equity and debt helps your investments stay on track without unnecessary risk.

Mutual fund strategy if you’re in your 50s

By 50, retirement is no longer a distant, but an approaching goal. With fewer earning years ahead, your mutual fund strategy should shift towards protecting wealth and ensuring steady, low-risk growth.

Limit your equity exposure to 40–50%, and stick to safer options like large-cap, diversified equity, or ELSS funds. Avoid sectoral, mid-cap, or small-cap funds unless you’re comfortable with sharp market swings. The remaining 50–60% should go into debt instruments. Consider putting around 20% in hybrid funds, and the rest in income, liquid, or gilt funds — which invest in government securities and offer more stability.

At this stage, preserving what you’ve built matters more than chasing high returns. Gradually reduce risk and focus on predictable income.

Mutual fund strategy if you’re in your 60s

In your 60s, the focus should shift from growing wealth to preserving capital and generating regular income.

Limit equity exposure to 10–20%, ideally through large-cap or balanced advantage funds. The aim is to beat inflation without exposing your money to too much risk. Consider placing 70 to 80 per cent of your investment in debt mutual funds. Choose low-risk options like liquid, short-duration, or gilt funds — they offer better returns than FDs and are easier to access in emergencies.

You can think about starting a Systematic Withdrawal Plan (SWP) from a debt or hybrid mutual fund. It offers regular income while keeping your investment intact. It works like a monthly pension and is more tax-efficient than interest income from FDs or savings accounts. Avoid high-risk options like mid-cap, small-cap, or sector funds.

At this stage, stability and liquidity matter more than high returns.

From your first job, until retirement, mutual funds can grow with you. The key is to stay consistent, review your goals often, and adjust your investments as life changes. This is the key to building lasting wealth.

Adhil Shetty is the CEO of BankBazaar.com