Starting late in mutual funds? Expert shares a Rs 40,000 SIP portfolio strategy for a 50-year-old

Many investors begin thinking seriously about mutual fund investments later in their careers as they look to grow their savings and prepare for retirement. While starting early offers the advantage of a longer investment horizon, financial experts say it is never too late to begin investing. Even investors in their 50s can build a disciplined portfolio through systematic investments if they align their strategy with their risk appetite and financial goals.

This was highlighted in a recent investor query from Dhiraj Kumar, a 50-year-old professional, an investor and a viewer of The Money Show on ET Now, who wants to start investing Rs 40,000 per month in mutual funds. He described himself as someone who is not familiar with handling market risk and prefers a portfolio with moderate risk.

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Responding to the query, Pankaj Mathpal, CEO of Optima Money Managers, said that while understanding market risk is important, mutual funds are managed by professional fund managers who actively manage investments and attempt to control risk within the scheme’s mandate.

“As he does not know how to manage market risk, that is very, very important. But the most important thing is that when you invest in a mutual fund, you have to understand that fund managers are also doing that job for you. They are trying to manage the risk but, at the same time, selection of funds should be proper and schemes you select should be suitable as per your financial goals,” Mathpal said.

According to Mathpal, investors should focus on selecting the right mix of funds based on their financial goals and investment horizon. In this case, the investor did not specify a target corpus or a specific financial goal. However, given his age, Mathpal assumed that he could be investing for at least five years or possibly longer.
For someone new to equity-linked investments and looking for moderate risk, he suggested beginning with a combination of hybrid and diversified equity funds.
“To start with, some hybrid funds like multi-asset allocation or dynamic asset allocation funds, flexi cap fund and an index fund can be a good starting point for him,” the expert said.
Mathpal recommended starting with schemes such as ICICI Prudential Balanced Advantage Fund, WhiteOak Capital Multi Asset Allocation Fund, HDFC Flexi Cap Fund, and SBI Nifty Index Fund. These funds represent different investment styles, including dynamic asset allocation, multi-asset exposure, actively managed diversified equity and passive index investing.

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Hybrid funds such as balanced advantage or multi-asset allocation funds can help moderate risk by spreading investments across different asset classes like equities, debt and commodities. Flexi-cap funds offer diversification by allowing fund managers to invest across large-cap, mid-cap and small-cap companies depending on market opportunities. Meanwhile, index funds provide low-cost exposure to broader markets by tracking benchmark indices.

Mathpal also highlighted an important behavioural aspect for new investors: patience. With markets expected to remain volatile at times, he advised investors not to track their portfolios too frequently.

Instead, investors should remain disciplined with their investments and review their portfolios periodically rather than reacting to short-term market movements. “Once you start investing, have patience, keep investing and once in a year you can review your portfolio, but your goal should be long term,” he said.

For investors starting later in life, consistency and realistic expectations become even more important. A structured SIP approach, a diversified portfolio and regular but not excessive monitoring can help investors gradually build wealth over time while managing market volatility.

One should always consider their risk appetite, investment horizon and goals before making any investment decision.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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