Mutual Funds · Category
Explore & investSolution-oriented & Life Cycle Funds
Retirement and children’s funds — a category SEBI closed to new money in February 2026 — and the life cycle funds that replace it.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
At a glance
- Who typically explores it
- Typically explored by existing holders of retirement or children’s funds deciding what to do next, and by goal-based investors who want asset allocation that reduces risk automatically as a target date approaches.
- Time horizon
- Life cycle funds are built around a stated maturity of 5 to 30 years. Legacy solution-oriented funds carried a lock-in of five years, or until retirement or the child’s majority if earlier.
- Volatility
- Changes over time: higher early in a life cycle fund’s glide path when equity is larger, lower as it shifts towards debt and other assets.
A general description of the category. Individual schemes differ — read each scheme’s documents.
Understand
01Solution-oriented & Life Cycle Funds
What changed in 2026
Solution-oriented schemes were a SEBI category made up of retirement funds and children's funds, with a lock-in of five years (or until retirement or the child's majority, if earlier). SEBI's circular of 26 February 2026 discontinued the category. Existing schemes stopped accepting fresh subscriptions, and fund houses must merge them into schemes with a similar asset allocation and risk profile, subject to SEBI's approval.
02Solution-oriented & Life Cycle Funds
If you already hold one
- Your units continue. You keep what you hold; scheme terms apply as per the documents.
- New instalments stop. SIPs into these schemes cannot continue as fresh subscriptions — check what has happened to yours.
- Read merger notices. When a scheme is merged, the fund house must inform you, and changes of this kind typically come with an exit window. Compare the receiving scheme's risk, costs and tax treatment with your goal before deciding.
03Solution-oriented & Life Cycle Funds
Life cycle funds
SEBI introduced life cycle funds as a separate category in the same circular. They are open-ended funds with:
- A stated maturity, from 5 to 30 years, which you match to a goal year.
- A pre-defined glide path that starts with more growth assets such as equity and shifts towards debt and other assets as maturity approaches. Permitted assets include equity, debt, InvITs and gold and silver ETFs.
- A declining exit load in the early years, to discourage short-term use.
The idea mirrors the age-based allocation in NPS auto choice: the fund lowers risk on a schedule so you don't have to. The trade-off is that the schedule is fixed for everyone in the fund, not tuned to your other assets.
Plan the goal first with the Goal Calculator, then decide whether a glide-path fund or a do-it-yourself asset allocation suits it.
Ideas to know
How gains are taxed
Solution-oriented & Life Cycle Funds: tax in brief
Tax treatment follows the fund’s asset mix — and in a life cycle fund that mix changes along the glide path, so a fund that starts out equity-oriented may not stay so. Check the scheme documents and the latest provisions before redeeming. Tax rules change and depend on your circumstances. This is general education, not tax advice — check the latest provisions or speak to a tax professional.
Schemes in solution-oriented & life cycle funds
Live scheme data isn’t connected yet
Before you decide
Risks to understand
Transition risk
Mergers of legacy schemes can change the fund you hold — its manager, costs, risk level or tax treatment.
Glide-path risk
A fixed schedule may be too aggressive or too cautious for your situation, and markets may fall just before a scheduled shift.
Market risk
Equity and other market-linked holdings can fall in value, especially early in the glide path.
The riskometer, SIPs and common questions
Related
Plan for it
Other categories
Next step
Small decisions compound.
Model a SIP with your own assumptions, size the goal it’s for, or talk to a CompoundX expert about how this category fits what you already own.
Disclosures
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Past performance may or may not be sustained in future. Calculators and illustrations on this site use hypothetical assumptions; actual returns may differ.
[To be confirmed by Compliance] Mutual-fund onboarding, KYC and transaction execution are processed through the platform of our investment platform partner, AssetPlus. CompoundX provides education, tools and relationship management, and does not hold client money or units. Registration details, where applicable, are listed on our Disclosures page.
Partner: AssetPlus · Investment platform
CompoundX works with AssetPlus as its investment platform partner. When you choose to invest in mutual funds through CompoundX, account opening, KYC and transaction execution are processed through AssetPlus' platform, which connects to the asset management companies, registrars and other market infrastructure involved.
CompoundX provides the education, financial tools, goal planning and relationship management around those investments. CompoundX does not hold client money or mutual-fund units. [To be confirmed by Compliance]
Registration details for CompoundX and its partners, where applicable, are listed on our Disclosures page.
Risk disclosure
Market-linked investments involve risk, including the possible loss of the amount invested. Past performance does not indicate future results, and the value of investments and the income from them can go down as well as up.
Deposits, bonds and other fixed-income products carry credit, interest-rate and liquidity risks; returns depend on the issuer honouring its obligations. Insurance is a contract of protection, not an investment. Read every offer document, scheme information document and policy wording carefully before you decide.