In a recent post on social media platform X, Radhika Gupta, Managing Director and CEO of Edelweiss Mutual Fund, highlighted what she believes is a defining shift underway in India’s asset management industry.
Her post focused on the steady but meaningful expansion of the regulatory framework by the Securities and Exchange Board of India (SEBI), which is reshaping how investment solutions are designed and delivered.
Gupta pointed out that recent regulatory changes are not superficial tweaks but structural upgrades that materially expand what asset managers can offer investors. Over the last few years, SEBI has introduced reforms such as debt passive regulations, Specialised Investment Funds (SIFs), and now Life Cycle Funds—each adding depth to the investment ecosystem.
“Over the last few years, SEBI has meaningfully expanded what asset managers can do. Debt passive regulations, Specialised Investment Funds, and now Life Cycle Funds are good examples. These aren’t cosmetic changes, rather they widen the solution set. It’s genuinely one of the most exciting times to be building in this business., Gupta said in the post.
Gupta called Life Cycle Funds – a major milestone for goal-based investing in India. Under this structure, asset allocation is linked directly to an investor’s time horizon rather than market timing or discretionary calls.
“The introduction of Life Cycle Funds under the new scheme categorisation framework is a big step for goal-based investing. Asset allocation automatically aligns to an investor’s time horizon, gradually moving from equity to lower-risk assets as the goal nears.”
She explained that this automatic shift—from higher equity exposure in the early years to more stable assets like debt as the goal approaches—reduces the burden of constant decision-making for investors. More importantly, it encourages discipline, which is often the missing link in long-term wealth creation.
Gupta also highlighted the practical appeal of such funds. By operating within the mutual fund structure, Life Cycle Funds retain tax efficiency while offering simplicity and clarity. In her view, this combination makes them especially suitable for retirement planning, education goals, and other long-duration financial objectives.
“Simple in concept. Powerful in outcome. And very practical for long-term financial planning,” she summed up.
What are Life Cycle Funds?
India’s mutual fund framework has seen a significant overhaul following the latest circular issued by SEBI on scheme categorisation and rationalisation. Through these changes, the regulator has sought to reshape the mutual fund products with a sharper focus on clarity, discipline, and long-term goal alignment.
One of the most notable shifts under the revised framework is the removal of solution-oriented schemes such as retirement funds and children’s funds. SEBI has discontinued this category entirely, instructing that “existing schemes in this category shall stop all subscriptions with immediate effect” and be merged with similar schemes, subject to regulatory approvals.
In place of these legacy products, SEBI has introduced an entirely new category of mutual fund schemes called Life Cycle Funds.
As outlined in SEBI’s Categorisation and Rationalisation of Mutual Fund Schemes circular dated February 26, 2026, Life Cycle Funds will be open-ended schemes with a pre-determined maturity. These funds will follow a glide path approach, investing across multiple asset classes such as equity, debt, Infrastructure Investment Trusts (InvITs), exchange-traded commodity derivatives, and gold and silver exchange-traded funds.
The underlying design is intended to automatically realign the portfolio mix over time, gradually shifting from higher-risk assets like equities to more stable instruments as the maturity date draws closer. This structure is meant to simplify decision-making for investors while keeping portfolios aligned with long-term objectives.
SEBI has specified that the tenure of Life Cycle Funds will range from a minimum of 5 years to a maximum of 30 years. Fund houses will be allowed to launch these schemes in multiples of five-year maturities, offering investors flexibility to match products with different life goals and time horizons.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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