SEBI Introduces Life Cycle Funds: Replaces Old Solution-Oriented Schemes

• SEBI launched Life Cycle Funds (LCFs) on February 26, 2026, replacing older solution-oriented schemes like retirement and children's funds.
• LCFs are goal-based mutual funds with a predefined maturity and an automatic 'glide path' for asset allocation, shifting from growth to conservative assets as maturity nears.
• This regulatory reform aims to enhance transparency, standardize risk management, and promote disciplined long-term investing.
• LCFs feature a multi-asset portfolio including equity, debt, InvITs, and Gold/Silver ETFs, with SEBI-mandated asset allocation bands.
• A tiered exit load (3% within 1 year, 2% within 2 years, 1% within 3 years) discourages premature withdrawals, fostering long-term wealth creation.