New Delhi, March 1 -- The Securities and Exchange Board of India (Sebi) has introduced a new mutual fund category-life cycle funds-aimed at automating how investors shift from growth to safety as they approach financial goals such as retirement or a child's education.

The move effectively redesigns solution-oriented mutual funds by replacing existing retirement and children's fund categories with a single structure that gradually changes asset allocation over time. Instead of investors having to rebalance portfolios themselves, often triggering taxes or putting off decisions, life cycle funds make those shifts automatically through a pre-defined "glide path".

The funds will be structured as open-ended schemes with a pre-determined matur...