ICICI Prudential Mutual Fund Launches Three Life Cycle Funds With Goal-Based Glide Path; NFO Opens August 26

ICICI Prudential Mutual Fund has announced the launch of ICICI Prudential Life Cycle Fund 2031, ICICI Prudential Life Cycle Fund 2036, &  ICICI Prudential Life Cycle Fund 2041. The New Fund Offer (NFO) for all three schemes opens on August 26, 2026, and closes on September 9, 2026.

The three schemes are structured as open-ended funds with a predetermined maturity and glide path strategy. The funds are designed for goal-based investing, with the asset allocation changing progressively as the respective maturity year approaches.

How the Life Cycle Fund Strategy Works

The funds initially maintain relatively higher equity exposure to provide potential for long-term growth. As the maturity year comes closer, the equity allocation is gradually reduced while debt and money-market exposure increases, with the objective of providing greater stability closer to the investor's goal date.

The schemes can invest across equity and equity-related instruments, debt and money-market instruments, Gold and Silver ETFs, Gold and Silver Exchange Traded Commodity Derivatives (ETCDs), and Infrastructure Investment Trusts (InvITs).

2031 Fund: Five-Year Maturity

The ICICI Prudential Life Cycle Fund 2031 has a five-year maturity horizon. When three to five years remain until maturity, equity and equity-related investments can range between 35 per cent and 50 per cent, while debt and money-market instruments can account for 25 per cent to 50 per cent.

When one to three years remain, equity exposure is reduced to 20 per cent-35 per cent, while debt and money-market exposure can rise to 25 per cent-65 per cent. In the final year, equity allocation can fall to 5 per cent-20 per cent, with debt and money-market exposure remaining at 25 per cent-65 per cent. Gold/Silver ETFs, ETCDs and InvITs can account for 0 per cent-10 per cent across these stages.
Defence-psu-secures-fresh-orders-across-radar-avionics-cyber-security-and-more-59219" id="alsoread">Also Read - Rs 730 Crore Order Win: This Navratna Defence PSU Secures Fresh Orders Across Radar, Avionics, Cyber Security and More

2036 Fund: Ten-Year Maturity

The ICICI Prudential Life Cycle Fund 2036 follows a ten-year investment horizon. During the initial five to 10 years, equity and equity-related exposure can range between 50 per cent and 65 per cent, while debt and money-market exposure can range between 5 per cent and 25 per cent

As the fund moves closer to maturity, the equity allocation progressively declines to 35 per cent-50 per cent, then 20 per cent-35 per cent, and finally 5 per cent-20 per cent in the final year.

2041 Fund: Fifteen-Year Maturity

The ICICI Prudential Life Cycle Fund 2041 has the longest horizon of 15 years. During the first 10 to 15 years, equity and equity-related exposure can range between 65 per cent and 80 per cent, while debt and money-market exposure can range between 5 per cent and 25 per cent.

The equity allocation subsequently reduces to 50 per cent-65 per cent, followed by 35 per cent-50 per cent, 20 per cent-35 per cent, and finally 5 per cent-20 per cent as the fund enters its final year.

Management Commentary

S Naren, ED & CIO, ICICI Prudential Mutual Fund, said the Life Cycle Fund brings together the fund house's experience with closed-end funds and expertise in managing Hybrid Funds.

He said the three offerings provide investors with 5-year, 10-year and 15-year horizons, allowing them to align the fund with a specific financial goal. According to him, the longer investment horizon allows greater participation in equity, while the allocation progressively becomes more conservative as the scheme approaches maturity.

He also highlighted that the funds remain open-ended, providing investors with flexibility to enter or exit without being constrained by the maturity date.

Investment Approach

The equity allocation combines a top-down assesSMEnt of macroeconomic developments with a bottom-up approach to identifying companies with above-average profitability and sustainable competitive advantages. The fund can invest across Large-Cap, mid-cap and Small-Cap companies depending on prevailing economic conditions and relative attractiveness.

The debt allocation is guided by internal macro frameworks covering duration management, accrual assets and a combination of duration and accrual strategies based on risk-reward assessment and interest-rate views. Gold, Silver and InvIT exposure is intended to provide diversification, with InvITs offering an opportunity to enhance portfolio yield.

Key Scheme Details

All three funds offer Direct and Regular Plans with the Growth option. The minimum application amount is Rs 100 and in multiples of Rs 1 thereafter, while the minimum additional application is also Rs 100. There is no entry load.

The exit load structure is the same across all three schemes: 3 per cent if redeemed before one year, 2 per cent between one and two years, 1 per cent between two and three years, and nil after three years.

The benchmark for the 2031 fund is Nifty 200 TRI (50 per cent), Nifty Composite Debt Index (45 per cent), Domestic Price of Gold (3 per cent) and Domestic Price of Silver (2 per cent). For the 2036 and 2041 funds, the benchmark comprises Nifty 200 TRI (65 per cent), Nifty Composite Debt Index (30 per cent), Domestic Price of Gold (3 per cent) and Domestic Price of Silver (2 per cent).

About Life Cycle Funds

Life Cycle Funds are designed to address the challenge of managing asset allocation as an investor approaches a financial goal. Instead of requiring investors to manually reduce equity exposure and increase debt allocation over time, the predetermined glide path adjusts the mix according to the scheme's maturity year.

The fund house states that the schemes are intended for investors seeking a goal-aligned investment approach across different asset classes, while the portfolio remains professionally managed within the limits specified in the Scheme Information Document.

Share your thoughts on this development in the comments below.
Disclaimer: The article is for informational purposes only and not investment advice.