Life Cycle Fund is an open-ended Mutual Fund with fixed maturity date. It is based on the Glide Path model, that is, as your financial goal gets closer, the fund automatically reduces the risk. In the initial years, more allocation is kept in Equity so that higher returns can be given. Over time the exposure gradually shifts to Debt, Gold ETFs, Silver ETFs and other safer assets. Investors get the opportunity to diversify across multiple asset classes like Equity, InvITs, Commodity derivatives. This concept is quite similar to the NPS model, but now this facility will also be available in regular Mutual Funds, which makes long term planning and disciplined investing easier.
SEBI’s masterstroke, will Life Cycle Funds become a game changer? Money Live
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