Your investments need a glide path as the goal gets closer. Here’s how it works — SkimNews
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- Sebi introduced a life cycle funds category that automates the glide path: portfolios start equity-heavy and shift to debt on a predetermined schedule as a target date approaches, removing rebalancing decisions from the investor.
- ICICI Mutual Fund and Zerodha Mutual Fund have already launched funds under the new category, with more fund houses expected to follow.
- Equity allocation under the framework ranges from 65–95% when more than 15 years from maturity, easing to 50–65% at five to 10 years out, 35–50% at three to five years, and 5–20% in the final year; debt moves inversely and can rise to 25–65% near maturity.
- Gold, silver and related instruments can account for up to 10% throughout the fund's life, taken through gold and silver ETFs and including exchange-traded commodity derivatives and units of infrastructure investment trusts.
- Vishal Dhawan, founder of Plan Ahead Wealth Advisors, said globally glide-path strategies let investors manage portfolios without needing to time equity trimming as the goal nears.
- Ravi Saraogi, co-founder of Samasthiti Advisors, framed such funds as suited to investors who want a "no-nonsense, zero maintenance portfolio."
- The prescribed bands are wide, so the article warns investors to read scheme documents for where within the band a fund intends to operate and to check the large-, mid- and small-cap split before investing.
Why it matters: Indian retail investors now have a Sebi-regulated, hands-off category designed to curb the behavioral mistake of staying in equity too long as a goal nears — relevant to anyone saving for a dated milestone like retirement or a child's education. With ICICI and Zerodha already on board and more fund houses likely to follow, investors gain more options but must still compare scheme documents because the wide equity bands (e.g., 65–95% at 15+ years out) allow two "glide path" funds to carry very different risk profiles.
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