The Indian mutual fund industry is seeing a major change. The Securities and Exchange Board of India (SEBI) has introduced a new category called Life Cycle Funds, replacing the older solution-oriented schemes such as retirement and children’s funds.
Following SEBI’s decision, fund houses have started launching new schemes under this category. Zerodha Mutual Fund and ICICI Prudential Mutual Fund have already filed draft documents for several Life Cycle Funds.
The new funds are designed to make long-term investing easier by automatically changing asset allocation based on the investor’s target year.
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What Are Life Cycle Funds?
A Life Cycle Fund is an open-ended mutual fund that comes with a specific target year, such as 2031, 2036, or 2041.
Unlike traditional hybrid funds, these schemes do not keep the same asset allocation throughout their life. Instead, they follow a “glide path” strategy.
In the early years, the fund invests more money in equities to generate higher returns. As the target year gets closer, the fund gradually shifts towards safer investments like debt and fixed-income assets.
This means investors do not need to regularly rebalance their portfolio themselves.
Why Did SEBI Introduce Them?
SEBI felt there was a need for a more structured and goal-based investment product.
As a result, it decided to replace solution-oriented schemes with Life Cycle Funds. Under the new rules, these funds must have a maturity period between 5 and 30 years, and the target year must be clearly mentioned in the scheme name.
The aim is to help investors invest according to their financial goals while reducing risk automatically over time.
A Popular Global Concept
Life Cycle Funds are similar to Target Date Funds, which are already widely used in countries like the United States.
Industry reports suggest that assets managed through target-date funds could reach $4.8 trillion in 2025. Over the last decade, the category has grown rapidly because it offers a simple and goal-focused investment approach.
SEBI now wants Indian investors to benefit from the same concept.
First Life Cycle Funds Filed With SEBI
Zerodha Mutual Fund was the first to file draft papers on June 5, 2026. The company proposed:
Zerodha Life Cycle Fund 2036
Zerodha Life Cycle Fund 2041
A few days later, ICICI Prudential Mutual Fund filed draft documents for:
ICICI Prudential Life Cycle Fund 2031
ICICI Prudential Life Cycle Fund 2036
ICICI Prudential Life Cycle Fund 2041
The Zerodha funds will follow a passive investment approach using index funds and ETFs, while the ICICI Prudential schemes will be actively managed.
What Should Investors Do?
More fund houses are expected to launch Life Cycle Funds in the coming months. Investors may soon get options with target years ranging from 2031 to 2056.
Before investing, choose a fund that matches your financial goal and time horizon. For example, if your goal is around 15 years away, a fund with a target year close to that timeline may be suitable.
Because these funds automatically reduce risk as the target date approaches, they can provide a more convenient and disciplined investing experience.