I will need Rs 30 lakh for my child’s studies in 3 years. Should I move my Rs 1.2 crore portfolio to safe assets?

These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.

I am 42 and have been investing through SIPs for over a decade. My mutual fund portfolio has grown to Rs 1.2 crore, with 90% invested in equity funds. I will need Rs 30 lakh in three years to fund my child’s higher education. When should I start moving this money to safer investments, and what is the best way to do it?

Pankaj Mathpal Founder, Optima Money Managers: While shifting money out of equity may mean missing some upside if markets continue to rise, remaining fully invested exposes you to the risk of capital erosion just when the money is needed. Since your child’s education is a non-negotiable goal, capital preservation should take priority over maximising returns.


Assuming the education expenses will be spread over three years in roughly equal instalments, I would recommend allocating Rs 10 lakh to an arbitrage fund for the first year’s requirement, Rs 10 lakh to an equity savings fund for the second year, and Rs 10 lakh to a dynamic asset allocation fund for the third year. Hybrid funds retain some equity exposure, allowing you to participate in potential market gains while reducing downside risk compared to pure equity funds.

This staggered approach protects the money earmarked for your child’s education while allowing the rest of your portfolio to remain invested for long-term wealth creation.

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I am 35, earning Rs 30,000 a month, have a two-year-old daughter. How should I plan for her higher education, and what type of health insurance should I buy for her?

Sarbvir Singh Joint Group CEO, PB Fintech: With a two-year-old daughter, time is firmly on your side with over 15 years to let the power of compounding do the heavy lifting for your corpus. For your child’s higher education, it’s worthwhile to not just invest in a fund, but also protect it from future uncertainties. Parents often spend time comparing returns but overlook the single most important feature in a child plan that one can ask for—waiver of premium.

In my view, it is one of the finest innovations in investment products. It ensures that even in the earning parent’s absence, the insurer takes over all future premiums and the child’s education fund continues uninterrupted. For higher education planning, focus on consistency rather than the size of your investment. At a Rs 30,000 income, even set ting aside Rs 5,000 a month today can make a meaningful difference over the next 15-16 years.

For instance, an assumed 12% annual return could potentially help build you a corpus of around Rs 25 lakh. As your income grows, increase your contribution every year. Even a 10% annual step-up can significantly improve the final corpus and help keep pace with rising education costs. On the health insurance front, don’t rely solely on your employer’s group cover. It is linked to your job and thus, may not offer a permanent security net.

Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com