SEBI Launches Life Cycle Funds With Glide Path — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- SEBI introduced a life cycle funds category built around the glide-path concept, with ICICI and Zerodha Mutual Fund already launching funds and more houses expected to follow
- The framework caps equity allocation at 65–95% when the fund is 15+ years from maturity, easing to 50–65% at five to 10 years out, 35–50% at three to five years, and just 5–20% in the final year
- Debt allocation moves inversely, rising to as much as 25–65% near maturity, while gold, silver, and related instruments through ETFs, commodity derivatives, and infrastructure investment trusts can account for up to 10% throughout
- The predetermined, time-based shift is designed to remove rebalancing decisions from investors, addressing behavioral pitfalls like staying in equity too long or making emotional calls when markets turn
- Vishal Dhawan, founder of Plan Ahead Wealth Advisors, said glide-path strategies help investors manage portfolios without needing to time equity trimming themselves
- Ravi Saraogi, co-founder of Samasthiti Advisors, described the category as suited for investors wanting a 'no-nonsense, zero maintenance portfolio'
- Within the wide allocation bands, the source urges investors to check each fund's split across large-, mid-, and small-caps and where within the band it plans to operate
Why it matters: Indian investors approaching long-term goals now have a SEBI-regulated, hands-off category that mechanically reduces equity exposure as deadlines approach. The wide allocation bands — 65–95% equity early, 5–20% near maturity — mean two funds in the same category can deliver materially different risk profiles depending on where within each band they operate.
Ask SkimNews
