Zerodha launches India's first life cycle funds: Know how the 2 new schemes work, minimum investment, and suitability
Zerodha Fund House has launched the life cycle fund series, becoming the first AMC to offer target-date mutual funds in the Indian mutual fund industry. The life cycle fund category was introduced by SEBI in February 2026.
Zerodha Fund House has launched the life cycle fund series, becoming the first AMC to offer target-date mutual funds in the Indian mutual fund industry.
The life cycle fund category was introduced by SEBI in February 2026. It is an open-ended fund with a target maturity date that follows a glide path, investing across multiple asset classes, including equity, debt, InvITs, exchange-traded commodity derivatives (ETCDs), and gold and silver ETFs.
Zerodha Life Cycle Fund series now offers two target-date variants:
- Zerodha Life Cycle Fund 2036, with a 10-year maturity
- Zerodha Life Cycle Fund 2041, with a 15-year maturity
How do these funds work?
Each life cycle fund is structured around a specific maturity year, called the target year, and invests across a mix of asset classes, including equity, debt, and commodities like gold and silver.
The portfolio follows a pre-defined asset allocation that shifts systematically from a growth-oriented (higher risk) allocation in the early years to a more conservative allocation (lower risk) as the target year approaches.
This means an investor in a life cycle fund today holds a meaningfully different portfolio from what they will hold after 10 years. The shift happens automatically, based on a pre-defined asset allocation path, without requiring any action from the investor.
For its equity allocation, the fund seeks to track the Nifty LargeMidcap 250 Index. On the debt side, it invests in Indian government securities (G-secs) across varying maturities, while also maintaining limited exposure to commodities and arbitrage opportunities.
Zerodha Life Cycle Fund 2036: Allocation schedule
| Period | Equity (Nifty LargeMidcap 250 Index) | Commodities (Gold & Silver ETFs) | Debt (Government Securities) | Arbitrage |
| 2026–2031 | 50%–65% | 0%–10% | 10%–20% | 10%–20% |
| 2031–2033 | 35%–50% | 0%–10% | 25%–30% | 20%–35% |
| 2033–2035 | 20%–30% | 0%–10% | 25%–30% | 35%–45% |
| Maturity Year (2036) | 10%–20% | 0%–10% | 25%–30% | Up to 50% |
Zerodha Life Cycle Fund 2041: Allocation schedule
| Period | Equity (Nifty LargeMidcap 250 Index) | Commodities (Gold & Silver ETFs) | Debt (Government Securities) | Arbitrage |
| 2026–2031 | 70%–80% | 0%–10% | 10%–20% | 0% |
| 2031–2036 | 50%–65% | 0%–10% | 10%–20% | 10%–20% |
| 2036–2038 | 35%–50% | 0%–10% | 25%–30% | 20%–35% |
| 2038–2040 | 20%–30% | 0%–10% | 25%–30% | 35%–45% |
| Maturity Year (2041) | 10%–20% | 0%–10% | 25%–30% | Up to 50% |
Key points to know about these funds
- These funds would be classified as equity for taxation purposes throughout their lifecycle.
- There is no lock-in period, and investors can exit at any time. However, an exit load of 3% applies if units are redeemed within one year, 2% if redeemed after one year but within two years, 1% if redeemed after two years but within three years, and no exit load is applicable after three years.
- The minimum investment amount is ₹100.
- The risk level of both schemes is marked as very high.
- At maturity, investors have full flexibility over their investments. They may choose to withdraw or remain invested as the fund may be merged with the nearest maturity life cycle fund in accordance with the regulations.
- The New Fund Offer (NFO) for both funds opened on 19 June 2026, and will close on 7 July 2026.
Who should consider investing in life cycle funds?
Life cycle funds are suitable for investors with a clearly defined long-term financial goal, such as retirement, a child's higher education, or buying a home.
They are also ideal for those who prefer a hands-off approach, allowing the fund to automatically reduce equity exposure and increase allocations to debt and arbitrage over time without requiring manual rebalancing.
However, these funds may not be suitable for investors who need money in the short-term, as exit loads apply during the first three years. They are also not ideal for investors who prefer to actively manage their asset allocation.
Vishal Jain, CEO of Zerodha Fund House, said, “Target-date funds, as a category, have transformed long-term investing globally, and we're excited to introduce something similar to Indian investors for the first time. We believe it has the potential to become the default long-term investment option for a generation of Indian investors.”
Disclaimer: This story is for educational purposes only. 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.