SEBI has recently introduced a new category of fund – Lifecycle funds. These are essentially target date funds – they mature on a target date and proceeds will be returned to the investor on maturity date automatically. The premise of this fund category is – allocation to risk assets like equities need to be reduced as target date approaches to ensure accumulated corpus is shielded from severe equity market downturns close to target date. Long story short – the idea is to lower your risk progressively as the target date approaches. Though this is not what has made news. Investors have been taken in more by the fact that such funds will be considered as equity funds throughout their lifecycle and no tax liability will lie on the investor when the periodic switch from equity to non equity funds and vice versa happens. Never mind such flexibility and maybe better tax efficiency exists already in NPS system , though with “lock-in” cost thrown in. Again, never mind the tax effic...