Asset Allocation by Age
How to split your investments between Equity, Debt, and Gold — for Indian investors at every life stage.
Long time horizon means you can ride out market volatility. Maximise equity for compounding. Debt is just for liquidity/emergency.
Equity Options
- • Large Cap Index (Nifty 50 / Sensex)
- • Flexi Cap Fund
- • Small Cap (10–15% of equity)
Debt Options
- • Liquid Fund (emergency)
- • Short Duration Fund
Gold
Sovereign Gold Bonds (SGBs) or Gold ETF. Not physical gold.
EMIs, family costs, and goals closer on the horizon. Shift a little toward debt for stability while keeping equity dominant.
Equity Options
- • Large Cap Index
- • Mid Cap Fund
- • ELSS (if needed for 80C)
Debt Options
- • Corporate Bond Fund
- • Liquid Fund
- • PPF (long-term debt)
Gold
SGBs for 8-year locks. Earns 2.5% interest + price appreciation.
Retirement is 15–20 years away. Goals like children's education are now near-term. Reduce volatility exposure gradually.
Equity Options
- • Balanced Advantage Fund
- • Large Cap Index
- • NPS Equity (Tier 1)
Debt Options
- • NPS Debt/Corporate Bond
- • FD (for goals within 3 years)
- • PPF
Gold
Maintain SGB or Gold ETF position. Don't add more unless rebalancing.
Capital preservation matters more. Equity still needed to beat inflation in retirement. Shift debt heavy with some gold as hedge.
Equity Options
- • Large Cap Index only
- • Conservative Balanced Fund
Debt Options
- • Senior Citizen Savings Scheme (SCSS)
- • PMVVY
- • Liquid/Short Duration for expenses
Gold
Higher gold at 10% as currency hedge and wealth preservation.
Rules of Thumb
100 minus age rule
A starting point only — equity % ≈ 100 − your age. Adjust for risk appetite and income stability.
Rebalance annually
When equity runs up, book some profits and rebalance back to your target. Keep portfolio honest.
Emergency fund is not investment
6 months of expenses in a liquid fund. This is separate from your asset allocation calculation.
Real estate is not in this mix
Your home is a lifestyle asset, not an investment. Don't count it as debt or equity exposure.
NPS = Debt + Equity combo
NPS Tier 1 equity allocation (up to 75%) counts toward your equity %. Don't forget it.
EPFO ≈ Debt
EPF contributions count as debt allocation. High earners often have more debt than they realise.
This is an educational framework, not personalised financial advice. Asset allocation depends on your risk tolerance, income stability, existing corpus, and specific goals. Consult a SEBI-registered financial advisor for a tailored plan.
Ready to Calculate Your Emergency Fund?
Before investing, make sure you have 6 months of expenses in a liquid fund.