A client returning from the US brings Rs 8.3 crore, about USD 1 million, and faces a USD 300,000 bill for her son's US college in six years. How would you invest it today across asset classes, and why? Treat currency as part of the answer.

Keep about USD 237k in high-quality dollar bonds matched to the college bill, and bring the rest home: a Rs 30 lakh reserve and about Rs 6.0 crore in a 60/40 rupee portfolio. At 4% the dollar sleeve grows to USD 300,000 in six years, paying the bill whatever the rupee does. Funding it in rupees would earn more interest but leave a Rs 35 lakh hole if the rupee reached 110. Currency is matched to where the money is spent.

What the money is for, in which currency and when. A family saving for a daughter's wedding in Dubai would keep dirhams for it, not rupees that must be converted at whatever the rate happens to be. Kavya has two jobs for the money: a fixed dollar bill in six years, and an open-ended future in rupees; each job gets its own assets in its own currency. Only after that split does the usual question of equity against debt come in, and it applies to the rupee side.

Size it to the bill, not to a percentage. USD 300,000 in six years at 4% needs USD 237,094 today, about Rs 1.97 crore, held in high-quality dollar bonds or deposits maturing near the first fee date. That is an asset-liability matchHolding assets whose currency, timing and amount mirror a known future payment, so market moves change both sides equally.: whatever the rupee does, the dollars arrive when the dollars are due. Equity has no place in this sleeve; a six-year horizon for a fixed bill is too short to carry it.

Because the higher rate is mostly the price of the rupee's expected fall. Rs 1.97 crore at 7% becomes Rs 2.95 crore in six years, and at a rupee of about 99, a 3% a year fall, the bill costs Rs 2.97 crore: roughly a draw. The trouble is the spread of outcomes: at 90 she has Rs 25 lakh spare, at 110 she is Rs 35 lakh short, and a college fee cannot be paid late. Matching gives up nothing on average and removes the hole.

A reserve and a long-horizon portfolio. Rs 30 lakh sits in a sweep account and a liquid fund; the remaining Rs 6.03 crore goes 60% into diversified equity, some of it global, and 40% into high-quality rupee debt. At 44 with a salary covering her costs, she can carry that equity for twenty years. Then name what must be checked: her residential status for tax in her first years back, whether she may keep dollar accounts and US securities as a returning resident, and how dollar interest and gains are taxed in India. Those rules decide where the dollar sleeve is held, not whether it exists.