SEBI Introduces Mutual Fund Reforms Including Lifecycle Funds and New Investment Norms

The Securities and Exchange Board of India (SEBI) has introduced comprehensive reforms to mutual fund categorisation, including discontinuing solution-oriented schemes like retirement and children's funds and introducing Life Cycle Funds with goal-based investing and glide-path equity allocation. The new rules allow equity funds to invest up to 35% of non-core assets in gold, silver, InvITs, and debt instruments. Fund houses can offer both value and contra funds with portfolio overlap limits, while sectoral and thematic funds face new restrictions to enhance transparency and simplify choices for investors. Industry concerns include tax implications and operational challenges related to scheme mergers.