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What is the story about?
Zerodha Fund House has launched a new category of mutual fund schemes called Life Cycle funds, becoming the first asset management company in India to offer target-date maturity funds.
The fund house has introduced two schemes — Zerodha Life Cycle Fund 2036 and Zerodha Life Cycle Fund 2041 — with maturity periods of 10 years and 15 years, respectively. The schemes are designed around a target year and invest across multiple asset classes, including equity, debt, gold and silver.
According to the fund house, the asset allocation will change automatically over time, gradually shifting from a higher-risk portfolio in the initial years to a more conservative allocation as the target year approaches.
The schemes will invest in equities by tracking the Nifty LargeMidcap 250 Index, while debt exposure will be through Indian government securities across different maturities. The funds will also have exposure to commodities and arbitrage strategies.
Globally, target-date funds manage assets of more than $4 trillion and are widely used as retirement investment vehicles. Zerodha Fund House said the structure is now being introduced in India through its Life Cycle fund series.
“The mutual fund industry has historically been organised around products. We believe the next phase of investing will be organised around goals,” said Vishal Jain, CEO of Zerodha Fund House.
Vaibhav Jalan, Chief Business Officer at Zerodha Fund House, said the funds are designed around a specific investment horizon, with the asset allocation remaining aligned to the chosen target year.
The schemes will be treated as equity funds for taxation purposes throughout their lifecycle. There is no lock-in period and the minimum investment amount is ₹100.
The new fund offer (NFO) for both schemes opened on 19 June and will close on 7 July. Additional Life Cycle funds with different maturity years may be launched in the future, according to the fund house.
The fund house has introduced two schemes — Zerodha Life Cycle Fund 2036 and Zerodha Life Cycle Fund 2041 — with maturity periods of 10 years and 15 years, respectively. The schemes are designed around a target year and invest across multiple asset classes, including equity, debt, gold and silver.
According to the fund house, the asset allocation will change automatically over time, gradually shifting from a higher-risk portfolio in the initial years to a more conservative allocation as the target year approaches.
The schemes will invest in equities by tracking the Nifty LargeMidcap 250 Index, while debt exposure will be through Indian government securities across different maturities. The funds will also have exposure to commodities and arbitrage strategies.
Globally, target-date funds manage assets of more than $4 trillion and are widely used as retirement investment vehicles. Zerodha Fund House said the structure is now being introduced in India through its Life Cycle fund series.
“The mutual fund industry has historically been organised around products. We believe the next phase of investing will be organised around goals,” said Vishal Jain, CEO of Zerodha Fund House.
Vaibhav Jalan, Chief Business Officer at Zerodha Fund House, said the funds are designed around a specific investment horizon, with the asset allocation remaining aligned to the chosen target year.
The schemes will be treated as equity funds for taxation purposes throughout their lifecycle. There is no lock-in period and the minimum investment amount is ₹100.
The new fund offer (NFO) for both schemes opened on 19 June and will close on 7 July. Additional Life Cycle funds with different maturity years may be launched in the future, according to the fund house.
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