The Securities and Exchange Board of India (SEBI) has overhauled the country’s goal-based investing framework by introducing a new category of Life-Cycle Funds, while discontinuing existing solution-oriented schemes such as retirement and children’s funds.
Key Highlights
- SEBI introduces life cycle funds to simplify long-term investing across different life stages and financial goals.
- New framework aims to enhance transparency, flexibility, and investor protection in solution-oriented mutual fund schemes.
Under the revised rules, all current solution-oriented schemes will stop accepting new subscriptions immediately and will eventually be merged with similar schemes, subject to regulatory approval. SEBI’s move aims to streamline product offerings, reduce duplication, and improve transparency in mutual fund categorisation.
The newly launched Life-Cycle Funds are designed as long-term, goal-based investment products that follow a glide-path strategy, automatically adjusting asset allocation as investors move closer to their financial goals. These funds will gradually reduce equity exposure while increasing allocations to debt and other relatively stable instruments, including gold and silver ETFs, helping investors manage risk more efficiently over time.
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Life-Cycle Funds will be offered with defined maturities ranging from five to thirty years, enabling investors to align investments with specific financial objectives such as retirement planning, education funding, or wealth creation. Each asset management company will be allowed to launch up to six such funds.
By replacing rigid goal-based categories with flexible, dynamically managed investment products, Securities and Exchange Board of India seeks to enhance portfolio discipline, simplify fund selection, and improve long-term outcomes for investors. The regulator believes this framework will promote transparency, strengthen investor confidence, and encourage more structured financial planning across India’s expanding retail investor base.
