Zerodha Fund House has launched an innovative new category of mutual funds in India: the Life Cycle Fund series. These target-date maturity funds are designed to align investments with specific future financial goals, automatically adjusting risk as the target year approaches.
Goal-Based Investing with Dynamic Risk Adjustment
Life Cycle Funds are structured around a specific maturity year, allowing investors to choose a fund that matches their long-term goal timeline. Initially, the funds adopt a growth-focused strategy with higher equity exposure. As the target year draws nearer, the portfolio gradually shifts towards more conservative investments, such as debt, to mitigate risk.
Currently, Zerodha has introduced two schemes under this series:
- Zerodha Life Cycle Fund 2036: Aims for a 10-year maturity horizon.
- Zerodha Life Cycle Fund 2041: Designed for a 15-year maturity horizon.
The fund house plans to launch additional schemes with different maturity years in the future to cater to a broader range of investor needs and life stages.
Flexible Investment with Broad Asset Exposure
A key feature of these new Zerodha Life Cycle Funds is their accessibility and flexibility. Investors can begin with a minimum investment of just ₹100, and there is no lock-in period, allowing redemptions at any time (subject to applicable exit loads).
The funds invest across a diversified range of asset classes, including:
- Equity: Primarily tracking the Nifty LargeMidcap 250 Index.
- Debt: Investing in Indian government securities (G-secs) across various durations.
- Commodities: Exposure to gold and silver.
- Arbitrage strategies.
The Zerodha Life Cycle Fund 2036 is benchmarked against a composite index comprising 50% Nifty 200 TRI, 5% physical gold, 5% physical silver, and 40% CRISIL 10-Year Gilt Index. The Zerodha Life Cycle Fund 2041 uses a similar structure but with 65% Nifty 200 TRI and 25% CRISIL 10-Year Gilt Index.
Both schemes will be managed by Kedarnath Mirajkar.
Bringing Global Investment Trends to India
Target-date funds are a well-established investment category globally, particularly popular in the United States as default retirement investment vehicles. Zerodha Fund House aims to introduce this proven goal-based investment approach to Indian investors, offering a simple and transparent structure.
Vishal Jain, CEO of Zerodha Fund House, highlighted the shift from product-centric to goal-centric investing. Vaibhav Jalan, CBO, emphasized how these funds help align asset allocation with specific life goals like child education, home buying, or retirement savings.
For taxation purposes, these funds will be classified as equity funds throughout their lifecycle, allowing investors to benefit from long-term capital gains tax treatment.
New Fund Offer Details
The New Fund Offer (NFO) for both Zerodha Life Cycle Fund 2036 and Zerodha Life Cycle Fund 2041 is currently open for subscription and will close on July 7, 2026. Following allotment, the schemes will reopen for continuous sale and repurchase.