MoneyWorks FS recommends mutual funds to secure your child’s future

Planning for a child’s higher education is a major financial goal for parents, and mutual fund investments can be an effective way to accumulate savings over time.

Specialised children’s mutual fund schemes allow investors to build a corpus aligned with long-term financial needs.

In a discussion with CNBC-TV18, Nisreen Mamaji, founder of MoneyWorks Financial Services, shared insights on how parents can approach these investments strategically.

According to Mamaji, the ideal investment approach depends on the time left until the child requires the funds. “Many parents are concerned about financing higher education while ensuring they meet their aspirations for their child. If the time horizon is long—say 10 to 15 years—you can afford to take on more risk for higher potential growth,” she explained.

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For long-term investors with a decade or more before their child turns 18, Mamaji suggests a diversified portfolio of direct equity mutual funds. The recommended allocation includes:

Invesco India Flexi Cap Fund – 34%

Motilal Oswal Midcap Fund – 33%

Nippon India Small Cap Fund – 33%

This combination balances growth potential with risk, making it a viable option for those starting early in their investment journey.

Adjusting the Strategy for Shorter Time Horizons

For parents closer to their child’s undergraduate education, the strategy shifts towards stability. “If your child is nearing 18, the focus should be on preserving capital while still ensuring some growth,” Mamaji advises. A more conservative allocation would involve:

ICICI Prudential Bluechip Fund – 75%

Invesco India Flexi Cap Fund – 25%

These large-cap funds provide relatively lower volatility and steady returns, aligning with the need for more immediate withdrawals.

For those with an even shorter time horizon, hybrid funds offer a balanced approach by blending equities with debt instruments. Mamaji recommends:

HDFC Aggressive Hybrid Fund or

Sundaram Aggressive Hybrid Fund

Hybrid funds typically maintain a 65:35 equity-to-debt ratio, providing moderate growth potential with reduced risk exposure.

Watch this video for more.

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