ICICI Prudential Mutual Fund Launches Life Cycle Fund 2031, 2036, And 2041, NFO Open Till September 9

ICICI Prudential Mutual Fund has launched three new schemes, ICICI Prudential Life Cycle Fund 2031, ICICI Prudential Life Cycle Fund 2036 and ICICI Prudential Life Cycle Fund 2041, built around fixed maturities of five, 10 and 15 years, respectively. The New Fund Offer (NFO) for all three opened on August 26, 2026, and will close on September 9, 2026.

The schemes are open-ended and run on a pre-determined glide path. Equity allocation stays high in the early years of each fund and is cut in a phased manner as the scheme approaches its maturity year, with debt allocation rising to match.

What Is A Life Cycle Fund

A Life Cycle Fund combines a multi-asset portfolio with a maturity-linked glide path. Equity exposure runs high early on to chase long-term growth, then tapers off as the goal date nears, with debt stepping in to add stability.

Each scheme can invest across equity and equity-related instruments, debt and money market instruments, and units of Gold and Silver exchange-traded funds (ETFs), Gold and Silver exchange-traded commodity derivatives (ETCDs), and Infrastructure Investment Trusts (InvITs). Equity allocation may also carry arbitrage exposure, within the scheme's overall equity limits.

The Glide Path, Fund By Fund

Life Cycle Fund 2031, the five-year scheme, holds 35-50 per cent in equity and 25-50 per cent in debt with 3-5 years left to run. That shifts to 20-35 per cent equity and 25-65 per cent debt in the 1-3 year band, and further down to 5-20 per cent equity in the final year, with debt climbing to 25-65 per cent. Gold, silver and InvIT exposure is capped at 10 per cent throughout.

Life Cycle Fund 2036, the 10-year scheme, opens at 50-65 per cent equity and 5-25 per cent debt with 5-10 years to maturity, then follows the same declining bands as the 2031 fund from the 3-5 year mark onward.

Life Cycle Fund 2041, the 15-year scheme, carries the highest starting equity band of the three at 65-80 per cent, with 10-15 years left, before stepping down through the same intermediate ranges as maturity approaches.

The fund house draws the analogy of a car needing every gear, noting that "using only the 1st gear would slow down the car," just as relying solely on the fifth would cause it to over-speed. Equity works like the higher gears early on, with debt taking over like a lower gear as each scheme nears maturity.

Why The Fund House Is Betting On This

S Naren, executive director and chief investment officer at ICICI Prudential Mutual Fund, said, “The Lifecycle Fund brings together the long-term mindset we have developed through our experience with closed-end funds, and our expertise in managing hybrid funds. With 5, 10 and 15-year horizon offerings, investors can align the fund with a specific financial goal. The key remains that the investment approach evolves as the investor moves closer to the goal. The longer time horizon allows for greater participation in equity, while the allocation can progressively become more conservative as the scheme approaches maturity. At the same time, being an open-ended scheme, it gives investors the flexibility to enter or exit without being constrained by the maturity date.”

He added, “We believe this combination of a defined goal, an evolving asset allocation and flexibility can make the Lifecycle Fund a meaningful addition to an investor's portfolio for those with a known financial requirement in the future.”

The Goal-Based Case

Financial priorities change with age. Early in their careers, investors may be saving for an education loan or a vacation. Later, the focus may shift to a house or wedding, followed by children's education and retirement.

Managing these goals through pure equity leaves investors to decide when to cut risk. That can be difficult during volatile markets, when fear of losses, herd behaviour and a tendency to focus on recent performance can influence decisions.

Life Cycle Funds automate this shift through a preset asset allocation strategy. The fund gradually moves from equity to debt as maturity approaches. Since these changes happen within the fund, investors do not face an additional tax impact from each switch.

The fund house cited data from 2012 to 2025 showing that equity, debt and gold led returns in different years. A portfolio combining all three delivered a more consistent return pattern over the period.

Investment Approach

The equity strategy takes both the broader economy and individual companies into account. Fund managers look at factors such as profitability, market share, earnings visibility, competitive strength, balance-sheet health and valuations before picking stocks. The portfolio can also move between large-, mid- and small-cap stocks depending on where they see better value.

Debt allocation is guided by the fund house's view on interest rates, using duration and accrual strategies. Gold and silver provide diversification, while InvITs add another source of income through their yield potential.

Scheme Details

All three funds are available under both Direct and Regular plans, with only the Growth option on offer. Investors can start with as little as Rs 100, while subsequent investments can be made in multiples of Re 1. There is no minimum redemption requirement and no entry load.

The exit load follows the same structure across all three funds. Investors pay 3 per cent if they exit within a year, 2 per cent between one and two years and 1 per cent between two and three years. Withdrawals after three years come with no exit load.

Life Cycle Fund 2031 is benchmarked against Nifty 200 TRI (50 per cent), Nifty Composite Debt Index (45 per cent), domestic gold price (3 per cent) and domestic silver price (2 per cent). Life Cycle Fund 2036 and Life Cycle Fund 2041 share a benchmark of Nifty 200 TRI (65 per cent), Nifty Composite Debt Index (30 per cent), gold (3 per cent) and silver (2 per cent).

Life Cycle Fund 2031 offers a systematic transfer plan (STP) alone. Life Cycle Fund 2036 and Life Cycle Fund 2041 offer SIP, systematic withdrawal (SWP) and STP. Fund managers are Aatur Shah, Manish Banthia, Rohit Lakhotia and Gaurav Chikane for the 2031 fund; Manasvi Shah, Manish Banthia, Rohit Lakhotia and Gaurav Chikane for the 2036 fund; and Divya Jain, Manish Banthia, Rohit Lakhotia and Gaurav Chikane for the 2041 fund.

Short-term capital gains up to 12 months will be taxed at 20 per cent, and long-term gains beyond 12 months at 12.5 per cent, across all three schemes. Investors should check with their tax advisor on how this applies to their own tax structure and regime.

Risk Profile

All three schemes sit in the “Very High” risk category on the riskometer and are aimed at long-term wealth creation. Their portfolios will follow a glide path, gradually changing the mix of equity, debt, InvITs, ETCDs and gold and silver ETFs as the schemes move towards maturity.

The fund house has clarified that the current risk assessment is based on its internal, pre-NFO view. It may change once the schemes start investing, in line with paragraph 6.16 of Sebi’s Master Circular for Mutual Funds dated March 20, 2026.