I’m 40, Have 30 Lakhs, Where Should I Invest in Mutual Funds?

With the upcoming elections in May 2024, many investors are uncertain about where to invest their money due to potential market fluctuations. Mr. Balamurugan V, an investor, recently asked for advice on what to do with his Rs 30 lakhs, which he obtained from selling land. Considering the current situation, we proposed a strategy to protect his money while aiming for good returns. In this article, we will discuss How to invest Rs 30 Lakhs in Mutual Funds in the current market scenario, with stock markets at peak levels and the upcoming elections in May 2024.

What is the Reader’s Goal?

Before getting into details, let’s first understand Mr. Balamurugan.V objectives of investing.  He got the funds by selling the land (keeping capital gains aside) and wants to invest this Rs 30 lakhs for his daughter future which is more than 10 years away. He is willing to take some risks, but also aims to get stable returns in the medium to long term by investing in mutual funds. He also want to invest in schemes that has combination of equity and debt. He always want to check the Top Mutual Funds that generated highest returns in last financial year 2023-24 too.

To summarise his goals:

  • He is willing to take high risks.
  • He aims to invest for the long term, over a period exceeding 10 years.
  • His objective is to build wealth for his daughter’s future

Can he invest in equity funds now?

Considering that the stock markets are currently at peak levels and with the upcoming elections just a few weeks away, there’s a possibility of volatility in the stock markets. While some experts expect the stock markets to reach new highs in the coming months, others caution that we might see a significant downturn of up to 30% post-elections. In such uncertain times, it might be best to adopt a systematic investment approach by investing regularly through SIP (Systematic Investment Plan). However, what is the best strategy to invest lumpsum of Rs 30 Lakhs now?

A Solid Strategy for Investing 30 Lakhs Now

One of the most effective approach to invest lumpsum is to invest in liquid funds and do Systematic Transfer Plan (STP) for next 9 months to 12 months to some of the selected equity mutual fund schemes. Investing in 1 or 2 mutual funds may screw up investors portfolio. Check what happened in case of 5 Worst Performing Mutual Funds in the last 10 years

Instead of this I would suggest to go for 5-7 mutual funds depending on the quantum of investments.

Understanding Liquid Funds: Liquid funds are a type of debt mutual fund that invest in short-term debt securities, such as treasury bills, commercial paper, and certificates of deposit, with maturities of up to 91 days. They are considered to be the safest funds among other mutual funds because of their low lending duration. Liquid funds are ideal for short-term investments and can generate higher returns than a savings bank account.

What is STP in Mutual Funds and How does it work – A Systematic Transfer Plan (STP) is a mutual fund strategy that allows investors to move a fixed amount of money from one fund to another at regular intervals. Investors can use STPs for lumpsum investments or to average out their purchase price over time. STPs can be useful for managing risk over the long term, especially during times of volatility.

For Balamurugan, we suggested he start by putting Rs 6 lakhs in each in different liquid funds. Then, every month, he can move Rs 50,000 from each liquid fund to his chosen equity mutual funds. This helps him avoid putting all his money in the stock market at once.

Suggested Mutual Fund Portfolio

While there are hundreds of consistent performing mutual fund schemes, here is the model portfolio recommended to him that contain largecap, midcap, flexicap, balance advantage fund and aggressive hybrid fund. Currently Balamurugan already investing in some of the largecap/midcap/flexicap funds and he does not want to invest his lumpsum in such funds and want to avoid AMC specific risk (not to invest in single AMC or only a fewer AMCs funds) in future.

Large Cap Fund: Such funds invests in big, stable companies, which can be less risky. As part of this, we have provided a largecap fund which we considered under 15 Most Recommended Mutual Funds to invest.

Mid Cap Fund: Such funds invest in medium-sized companies, which can offer good growth potential, however comes with risk.

Flexi Cap Fund: Flexi-cap funds are flexible and can invest in big or small companies, depending on what’s best at the time. In simple terms such funds invest in largecap companies, mid-size companies and smallcap stocks. HDFC Flexicap Mutual Fund recommended below is among the 5 Mutual Fund Schemes that has highest NAV.

Balanced Advantage Fund: These funds balance between investing in stocks and safer options like bonds, offering stability.

Aggressive Hybrid Fund: These funds mix stocks and bonds, giving a balance of safety and growth potential.

I'm 40, Have 30 Lakhs, Where Should I Invest in Mutual Funds

Conclusion: During uncertain times, it’s smart to invest carefully. For Balamurugan and others like him, spreading investments across liquid funds and using STP can help reduce risks. By choosing the right mutual funds, investors can aim for good returns while protecting their money.

Suresh KP


  1. I am 40 year old, I have started doing SIP , some are one-time and some are per month SIP, Here is the list:-

    A—One time SIPs

    1.Quant Small Cap Fund Direct Plan- One time invested One lakh and have kept it for 5 years.
    2.Nippon India Multi Cap Fund Direct Growth-One time invested One lakh and have kept it for 5 years.
    3.ICICI Prudential Small Cap Fund Direct Plan Growth-One time invested One lakh and have kept it for 5 years.
    4.Kotak Nifty AAA Bond Jun 2026 HTM Index Fund Direct Growth

    B–Monthly SIPs
    1.HDFC Mutual fund – 10,000 per month
    2.Quant Small Cap Fund Direct Plan- 15,000 per month3. SBI PSU Direct Plan Growth-10,000 per month.

    My aim is to make 50 Lakhs in 5 Years, am i actually contributing in the right fund or do I need to change, I have taken high risk.


    1. This depends on your risk appetite and how long you can invest. The funds indicated by you are high risk. In case you are high risk investors, you can continue. Also HDFC MF complete name is not provided.

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