By Admin 
SEBI introduces Life Cycle Funds: The Indian mutual fund industry is now moving towards a new era. The Securities and Exchange Board of India (SEBI) stepped in with a new type of mutual fund called ‘Life Cycle Funds’ on February 26, 2026. Fund houses have reacted rapidly to this rule change. The two asset management companies filed their drafts with SEBI in the first week of June 2026. With the filing of these drafts, the old solution-based plans have come to an end. SEBI has replaced them with a more dynamic structure. Investors will now get the benefit of customized automatic asset allocation as per a particular time frame.
The new filings show that fund houses are looking to attract long-term retail capital through this target-based investment route. What is Life Cycle Fund? Life Cycle Fund is an open-ended mutual fund with a pre-determined maturity year. Unlike a traditional hybrid fund, the asset allocation does not remain fixed.
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Instead, the fund follows a “glide path”. This means that the portfolio gradually becomes more conservative as it approaches maturity. In the initial period, equity investments may form a major portion to achieve growth in the portfolio. As the target date approaches, investments become more conservative through an increase in debt or other fixed-income investments.
Why did SEBI introduce this category?
This new category emerged when SEBI decided to close down solution-oriented schemes, which included retirement funds and children’s funds. SEBI felt that there was a need for a more structured target-based product.
As a result, life cycle funds were introduced as a separate category within the mutual fund framework. Under the regulations, these funds should have a pre-determined maturity period between 5 years to 30 years. The maturity year should also be disclosed in the name of the scheme. A global solution for Indian retail investors This concept is not entirely new to the financial world. These products have gained huge popularity among western investors under the brand name of Target Date Fund. This trend has already become quite popular in the United States.
According to available industry reports, assets managed through target date funds are expected to grow to $4.8 trillion in 2025, an increase of 20.3% from the previous year. Over the past decade, the sector has grown by 11.9% annually. Through the introduction of Life Cycle Funds, SEBI aims to bring a uniform goal-oriented investment framework for Indian investors. Inside the first SEBI filing, information available on the official SEBI website shows that five drafts of offer documents have been submitted.
Zerodha Mutual Fund was the first to move, filing draft documents for the two schemes on June 05, 2026. These include Zerodha Life Cycle Fund 2036 and Zerodha Life Cycle Fund 2041. A few days later, on June 08, 2026, ICICI Prudential Mutual Fund submitted draft papers for the three schemes. The proposed offerings include ICICI Prudential Life Cycle Fund 2031, ICICI Prudential Life Cycle Fund 2036, and ICICI Prudential Life Cycle Fund 2041.
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A closer look at 5 individual plans
1. Zerodha Life Cycle Fund 2036 The fund targets an investment horizon of 10 years from the time of its filing. It is designed for investors who have important financial goals coming in the middle of the next decade. This will be done to ensure low operating costs by investing in index funds and exchange traded funds using a passive approach. The benchmark portfolio will consist of 50% Nifty 200 TRI, 40% Crisil 10-year Gilt Index, and 5% each of Indian gold and silver indices.
2. Zerodha Life Cycle Fund 2041 This scheme gives investors a long time period of 15 years to grow their capital. Because the target is years ahead, the fund starts with a more aggressive stance. Its benchmarks are heavily tilted towards growth, with 65% in Nifty 200 TRI, 25% in Crisil 10-year Gilt Index, and 5% in physical gold and silver. If you are a young investor planning for long-term wealth creation, this longer glide path allows the fund manager to maximize equity exposure during the first few years.
3. ICICI Prudential Life Cycle Fund 2031 ICICI Prudential Life Cycle Fund 2031 is targeted at investors looking for long-term wealth creation through a diversified portfolio. This open-ended scheme comes with a target maturity year of 2031 and follows a glide path strategy. In this scheme, the asset allocation changes gradually over time. The fund is classified under ‘very high’ risk category. Its benchmark is created with 50% weighting with Nifty 200 TRI, 45% weighting with Nifty Composite Debt Index, 3% weighting with domestic gold prices, and 2% weighting with domestic silver prices.
4. ICICI Prudential Life Cycle Fund 2036 This intermediate plan matches the 10-year time horizon of the Zerodha 2036 fund, but it will use an active management style. Its benchmark is created with 65% weighting with Nifty 200 TRI, 30% weighting with Nifty Composite Debt Index, 3% weighting with domestic gold prices, and 2% weighting with domestic silver prices.
5. ICICI Prudential Life Cycle Fund 2041 This last scheme offers a 15-year investment window under the active management umbrella. This provides a long runway for investors who want to see professional fund managers actively trading and rebalancing their assets over the next decade and a half. As per the draft filing, the scheme can invest in equities, debt instruments, InvITs, REITs, Gold ETFs and Silver ETFs.
The fund is classified under ‘very high’ risk category. Its benchmark is a composite index consisting of 65% weight of Nifty 200 TRI, 30% weight of Nifty Composite Debt Index, 3% weight of domestic gold prices and 2% weight of domestic silver prices. What’s next for investors Zerodha and ICICI Pru The entry of the company is only the beginning. Several other asset management firms are expected to file their draft documents in the coming months.
Investors will soon have a wide range of target years to choose from, ranging from 2031 to 2056. When these funds open for public subscription, you should evaluate them based on your financial timeline. Look at your ultimate goal, calculate the remaining years, and choose the relevant fund. It provides a true financial autopilot experience for the common investor. Disclaimer: This article is for informational purposes only and is not investment advice.