What are Sebi's new Life Cycle Funds?

Life Cycle Funds are a new category of mutual fund schemes introduced by Sebi. They are open-ended funds with predetermined maturity dates and a glide path designed for goal-based investing.

How do Life Cycle Funds work?

These funds automatically align asset allocation with an investor's time horizon, gradually shifting from equity to lower-risk assets as the investment goal nears, promoting discipline and simplifying financial planning.

What is the tenure for Life Cycle Funds?

Life Cycle Funds can be launched with a minimum tenure of five years and a maximum of 30 years, with tenures available in multiples of five years.

Home / Business and Economy / New Life Cycle Funds Simplify Goal-Based Investing

New Life Cycle Funds Simplify Goal-Based Investing

26 Feb

•

Summary

Life cycle funds automatically adjust asset allocation over time.
Funds offer predetermined maturity with a glide path.
Minimum tenure is five years, maximum is 30 years.

New Life Cycle Funds Simplify Goal-Based Investing

The market regulator, Sebi, has launched Life Cycle Funds, a novel mutual fund scheme category. These are open-ended funds characterized by predetermined maturity dates and a 'glide path' for goal-based investing.

Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, hails this as a significant advancement for goal-based investing. She noted that these funds automatically adjust asset allocation according to an investor's time horizon. This feature helps maintain discipline and reduces the need for continuous investor intervention.