One of the most popular thumb-rules in asset allocation was the (100-Age) rule. The rule said that if you are 30 years old then (100-30) or 70% portfolio allocation must be in equities. So, a person at the age of 70 would have just 30% in equities. While this thumb rules gives a quick view of asset allocation, there were always questions raised about the relevance of such a rule. Now, it emerges that this thumb rule is exactly the opposite of what is happening in the real world. Between the end of Round-1 of COVID pandemic and year 2025, the allocations across equity and debt show some interesting shifts. 

The data published by AMFI Annual Report gives a comparison of asset allocation in 2025 with asset allocation in 2020. This classification is seen across 4 age brackets and across 5 different asset classes. Here, mutual funds have been taken as a proxy and specific category of funds have been used for comparison. For example, between FY20 and FY25, investors under 25-years saw equity fund allocation up from 41% to 47%. 

An interesting inference is that people in upper age groups have seen a much higher allocation to equities in 2025 as compared to 2020. That is because, in the aftermath of the COVID pandemic and global shutdowns, the liquidity glut in the economy and low interest rates were supportive of equity investing. Also, the shift to equities in higher age groups was driven by the TINA factor; and the favourable tax-treatment of equity funds. 

Broadly, there are 6 key trends that we identified from the report on asset allocation. 

1. If you look at the alternatives category (hybrid funds, passive funds, and solution funds), there has been higher allocation in 2025 compared to 2020. With fund managers struggling to beat the index; there was rising demand for passive funds.
2. Apparently, the correction and bounce post COVID convinced investors that equity allocation may be a slotting machine in the short run, but it is a weighing machine in the long run. Equities, not only enhance returns, but also reduce risk in long term.
3. In all the age groups, debt seems to be going out of favour. This is due to tepid returns, worsened by the unfavourable tax treatment of debt fund returns.
4. The rise in SIPs show that financial planning is contributing to the spike in demand for equity funds. This automatically pre-supposes a longer-term perspective.
5. The anomalous story is that people are becoming more willing to take risk after an age. That is due to greater financial comfort, and lower responsibilities after an age.
6. People in the higher age groups appear to be using passive funds more effectively to manage their transition from debt to equity focused investing.