What is a Life Cycle Fund? SEBI's new category
A Life Cycle Fund is a mutual fund category SEBI created in its circular dated 26 February 2026. It is an open-ended scheme built around a target maturity year, and its asset allocation is not static: it follows a glide path that moves from equity towards debt as that year approaches. A Life Cycle Fund replaces the slot vacated when SEBI discontinued solution-oriented schemes in the same circular. This page explains the rules the category runs on. It is not investment advice.
Definition
A Life Cycle Fund
is an open-ended mutual fund category introduced by SEBI in 2026, structured around a target maturity year, whose allocation follows a defined glide path shifting from equity towards debt as maturity approaches. Tenure runs from 5 to 30 years. Source: SEBI circular dated 26 February 2026.
How does a Life Cycle Fund work?
A Life Cycle Fund carries a maturity year in its name, and the portfolio is expected to reflect the time left to that year rather than a fixed equity-debt split. Early in the life of the scheme the allocation sits further towards equity. As the maturity year gets closer, the glide path moves it towards debt. The scheme can allocate across equity, debt, InvITs, exchange traded commodity derivatives, and gold and silver ETFs.
The rules SEBI set on the category:
| Rule | What the circular specifies |
|---|---|
| Tenure | Minimum 5 years, maximum 30 years |
| Launch increments | Multiples of five years |
| Allocation | Glide path across asset classes, shifting from equity towards debt near maturity |
| Schemes per AMC | Maximum six open for subscription at any time |
| Early exit load | 3 percent in year one, 2 percent in year two, 1 percent in year three |
5 to 30 years
Permitted tenure range for a Life Cycle Fund, launched in multiples of five years
Source: SEBI circular dated 26 February 2026
Why did SEBI introduce the category?
The same 26 February 2026 circular discontinued the solution-oriented group, which contained children's funds and retirement funds. Those schemes stop accepting fresh subscriptions and are to be merged. The problem with the old group was that the label described a purpose while the mandate did not require the portfolio to change as that purpose came closer. A target-maturity glide path makes the time dimension part of the mandate rather than part of the marketing. For the comparison in full, see solution-oriented fund vs Life Cycle Fund.
The category sits inside the wider reset described in mutual fund scheme categorisation.
What to read before relying on a glide path
The circular sets the category boundary. It does not publish the glide path itself, which is a scheme level disclosure. So the documents matter more here than in a static category:
- The scheme information document states the intended glide path and the ranges at each stage. How to read one is in SID vs KIM vs SAI.
- The monthly portfolio shows where the allocation actually sits, which is the only way to check the glide path is being followed. AMCs publish it within 10 days of month end.
- The riskometer is recalculated and disclosed monthly, and on a gliding scheme it should move over the years rather than stay pinned. See what is a riskometer.
What a Life Cycle Fund does not guarantee
A target maturity year is a design feature, not a promise about value on that date. The glide path governs asset allocation, not outcome, and a scheme moving towards debt near maturity still carries market and credit risk. The category is also brand new: as of this writing the rules exist and the schemes are being built to them, so category-level history does not exist yet and any long-run comparison you find is drawn from a different category. Treat a Life Cycle Fund as a mandate you can read, dated to the circular that defined it. Flock reports public filings with every claim sourced and dated. What any of it means for your money is your call to make.
Frequently asked questions
What is a Life Cycle Fund?
A Life Cycle Fund is a mutual fund category introduced by SEBI in 2026. It is an open-ended scheme with a target maturity year that follows a glide path, shifting allocation from equity towards debt as maturity approaches. Source: SEBI circular dated 26 February 2026.
What tenures can a Life Cycle Fund have?
Tenure runs from a minimum of 5 years to a maximum of 30 years, and schemes are launched in multiples of five years. The fund name reflects the target maturity year, so the tenure is visible before you read the scheme document. Source: SEBI circular dated 26 February 2026.
How many Life Cycle Funds can one AMC run?
A mutual fund may keep a maximum of six Life Cycle Fund schemes open for subscription at any one time. The cap limits how many overlapping maturity years a single fund house can offer. Source: SEBI circular dated 26 February 2026.
Does a Life Cycle Fund charge an exit load?
Yes. SEBI prescribed a tapering early-exit load on the category: 3 percent in year one, 2 percent in year two and 1 percent in year three. The load structure reflects the long-dated design of the category. Source: SEBI circular dated 26 February 2026.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.