Why Zerodha Fund House is bullish on life cycle funds

Asset manager Zerodha Fund House launched its Life Cycle Fund 2031 a few days ago. As the name suggests, the fund has a five-year maturity horizon and is the third fund in the series, following the launch of Life Cycle Fund 2036, with a 10-year horizon, and Life Cycle Fund 2041, with a 15-year horizon, earlier this year.

In total, Zerodha Fund House has approval for six Life Cycle Funds. Two more funds, maturing in 2046 and 2051, respectively, are expected to be launched soon.

For the uninitiated, Life Cycle Funds are similar to target maturity funds and were introduced by the Securities and Exchange Board of India (Sebi) in February 2026, replacing the earlier category of solution-oriented funds, which included retirement and children’s funds. Life Cycle Funds have a target maturity date and follow a pre-defined glide path towards that target.

Vishal Jain, CEO of Zerodha Fund House, points out that while people invest for specific goals, they often struggle with questions such as when to invest, where to invest and what the ideal asset allocation between equity, debt and commodities should be. Many also do not have the time to manage their portfolios. Life Cycle Funds, therefore, can be a relevant product for such investors.

He explains that someone approaching retirement would typically not want to maintain a portfolio with 70-80% exposure to equity. Instead, the portfolio would gradually move towards a higher allocation to debt to preserve the gains made during the initial years.

“That’s the basic philosophy of a Life Cycle Fund, where slowly, every year, a small portion of the equity portfolio moves into debt. As you come closer to your goal, you will have a larger part of the portfolio in debt,” he said.

“Right from deciding how much money should go into each asset class to how that portfolio should move over the next 5-10-15 years is something that is automated in the entire product. So we think it’s a fantastic product for people who just want that hands-off product and can keep putting in money at regular intervals,” he told Business Today.

According to Jain, the category will require considerable investor education, although initial interest has been encouraging. When Zerodha Fund House launched the 2036 and 2041 Life Cycle Funds, they received inflows of around Rs 10 crore. Their assets under management (AUM) have since doubled.

“It will require constant education. It is something that we are conscious of and that we are doing on a consistent basis through our own platforms and digital media. We obviously need to ratchet it up more and take it to the next level,” he said.

Zerodha Fund House focuses on passive index funds and exchange-traded funds (ETFs). At the end of June 2026, its average assets under management, including domestic fund of funds, stood at around Rs 16,100 crore.

According to Jain, the fund house is more or less complete with its initial product suite, which he described as the building blocks for investors to construct portfolios. While more products may be added, the focus is now shifting towards expanding sales and distribution.

As part of this strategy, Zerodha Fund House tied up with quick-commerce company Swiggy in June for a programme that enables Swiggy delivery partners to invest part of their earnings in mutual funds through the Swiggy rider app. Delivery partners can start investing with as little as Rs 100.

Jain said the fund house is exploring several such integrations.