Children's Day serves as a great reminder for parents and guardians to consider long-term financial planning for their children's future. Investing in children’s mutual funds can be a smart way to build a substantial corpus for education, marriage, or other significant milestones. These funds are designed to provide a blend of growth and safety by investing in equity and debt instruments suitable for long-term horizons.
With diverse options and the power of compounding, these funds provide a secure and stable pathway to achieve your dreams for your child's future, while also inculcating valuable financial habits in them early on. On this Children’s Day, let’s explore the best mutual funds specially designed to secure and grow your child's financial future.
Children's mutual funds lock in your investment for at least 5 years, potentially extending until the child reaches adulthood (+18). This long-term commitment discourages withdrawals and protects against market volatility, promoting greater returns compared to liquidating during dips. Children's mutual funds in India often have a high exit penalty, typically exceeding 4%, to discourage early redemption and enable the funds to accumulate more interest over their typically five-year lock-in period.
This fund stands out for its aggressive equity exposure (particularly to small and mid-cap stocks), high recent returns, and strong Sharpe ratio of 1.22, reflecting favourable risk-adjusted performance. The long lock-in helps to enforce disciplined investing for children’s milestones. Its alpha of 9.58 signals strong manager value-add, making it a top pick for growth-oriented investors.
SBI Magnum Children’s Benefit Fund is an open-ended children’s fund from SBI Mutual Fund, launched on 05-09-2020 and managed by Dinesh Ahuja, Rama Srinivasan, and Mohit Jain. The scheme follows a mixed-AUM strategy and tracks the CRISIL Hybrid 35+65 Aggressive Index. As of 31-10-2025, it holds a total AUM of ₹4,735.03 crore with a TER of 1.84%. Since its inception, the fund has delivered a CAGR of 34.29%, compared with its benchmark’s 12.38%.
ICICI Prudential’s children’s fund offers long-term stability with a balanced approach across equity and debt. The returns are consistent over 10 years, indicating portfolio resilience across market cycles. Its relatively lower volatility is attractive for investors preferring moderate risk while still accumulating a sizable corpus for their child’s future.
ICICI Prudential Children’s Fund, launched on 20 August 2001, is a mixed-AUM open-ended scheme under ICICI Prudential Mutual Fund and is benchmarked against the NIFTY 50 Hybrid Composite Debt 65:35 Index. The fund is primarily managed by Lalit Kumar, Darshil Dedhia, and Rohit Lakhotia, with additional support from other co-managers. As of 31 October 2025, the scheme manages a total AUM of ₹1,412.41 crore with a TER of 2.18%. Since its inception, the fund has delivered a CAGR of 15.58% against the benchmark’s 12.38%, highlighting its long-term performance in the children’s fund category.
This scheme is designed with steady equity exposure and a well-diversified portfolio spread. Returns have been stable across periods, and the fund is favoured for defensive positioning with a track record of minimizing downside in volatile phases. Parents looking for a lower-risk, long-term option will especially value this fund’s blend of consistency and prudence.
HDFC Children’s Fund is an open-ended mixed-AUM scheme managed by Chirag Setalvad, Anil Bamboli, and Dhruv Muchhal under HDFC Mutual Fund. The fund follows the NIFTY 50 Hybrid Composite Debt 65:35 Index as its benchmark and has a TER of 1.73% as of 31 October 2025. It has a total AUM of ₹10,534.68 crore. Since its inception, the fund has delivered a CAGR of 15.94% compared to the benchmark’s 11.53%, reflecting strong long-term performance.
UTI’s offering is equity-centric, ideal for investors who have a higher risk tolerance and a longer investment horizon. The fund’s reasonable performance over 10 years makes it a dependable contender in the children's fund segment. Portfolio management leans toward generating capital appreciation with sound stock selection and sectoral balance.
UTI Children’s Equity Fund is an open-ended children’s fund launched on 17 February 2004 and managed by Sachin Trivedi under UTI Mutual Fund. The scheme follows a mixed-AUM approach and tracks the NIFTY 500 TRI benchmark. As of 31 October 2025, it has a TER of 2.23%, total AUM of ₹1,170.56 crore. Since its inception, the fund has generated a CAGR of 10.38% compared to the benchmark’s 12.5%, offering a long-term option for investors planning for their children’s future financial goals.
End your Children’s Day by starting a journey of financial security for your child. Choose a fund that aligns with your vision and take the first step towards a prosperous future.
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