Solution Oriented Funds are mutual fund schemes structured to address targeted life goals. Whether it's securing your child’s future, ensuring a comfortable retirement, or saving on taxes, these funds offer goal-focused investment strategies. These are typically long-term funds with lock-in periods to encourage consistent investing and wealth accumulation.
Types of Solution Oriented Funds
1. Child Education Funds
Designed to help parents plan and invest for future education expenses of their children, these funds aim to build a corpus over a fixed duration.
- Equity-Debt Mix: Balances growth with stability depending on the child’s age.
- Lock-in Period: Generally has a lock-in until the child turns 18.
- Goal-Based Withdrawals: Structured for educational milestones like school, graduation, or higher studies.
2. Retirement Savings Funds
These funds are created to build a retirement corpus and provide income post-retirement.
- Lifecycle Allocation: Higher equity exposure in early years, shifting to debt as retirement approaches.
- Annuity Options: May allow conversion to regular income after retirement.
- Mandatory Lock-In: Typically comes with a 5-year or retirement age lock-in.
3. Tax Saving Funds (ELSS)
Equity Linked Saving Schemes (ELSS) allow you to save tax under Section 80C while building long-term wealth.
- Short Lock-In: 3-year lock-in period, the shortest among tax-saving instruments.
- Equity Exposure: High potential for capital appreciation through equity investments.
- Dual Benefit: Tax saving and wealth creation in one product.
4. Capital Gain Bonds (54EC)
Special bonds used to reinvest long-term capital gains and save tax under Section 54EC of the Income Tax Act.
- Capital Gains Exemption: Invest gains from property sale to save tax.
- Fixed Tenure: Usually 5-year lock-in with a fixed interest rate.
- Eligible Issuers: Typically issued by government-backed institutions like REC, NHAI, etc.
Key Features of Solution Oriented Funds
- Goal-Specific strategy : Funds aligned with major financial milestones—education, retirement, tax savings.
- Disciplined Investing : Lock-in periods encourage long-term commitment and compounding benefits.
- Tax Efficiency : Some categories offer tax exemptions or deductions under prevailing laws.
- Professional Fund Management : Expertly managed portfolios based on defined risk profiles and durations.
- Balanced Risk Approach : Combination of equity and debt ensures both growth and stability.
- Transparent & Regulated : Governed by regulatory norms with clear mandates and disclosures.
Solution Oriented Funds are more than investments—they’re a structured path toward your life goals. Whether it's ensuring quality education for your child, preparing for a stress-free retirement, saving taxes, or reinvesting gains, these funds offer strategic and reliable options.