Children’s Day Special: Child Mutual Funds Explained! Key Differences from Regular MFs, Tips to Pick the Right One

Children’s Day Special: Securing a top rank in the city’s best schools, clearing entrance tests for global institutions like Harvard, Columbia, or Oxford, and handling coaching pressure are major challenges children face in the pursuit of quality education. Yet, behind this effort runs an equally demanding race for parents—to ensure that money never becomes a roadblock.

From costly school admissions to soaring college fees and coaching expenses, the financial load is heavy. As we celebrate Children’s Day 2025, let’s understand how Children Mutual Funds (Child Mutual Funds) can help in planning for a child’s future.

Children’s Day 2025 Special: What is a Children’s Mutual Fund?

A children’s mutual fund is a subcategory of solution-oriented mutual funds.
The key feature of a Children’s Mutual Fund is that it comes with a lock-in of at least five years, or until the child attains adulthood, whichever is earlier.

It helps parents build a long-term financial corpus for a child’s education, marriage, and major life goals. These funds offer structured investment planning, enabling parents to prepare for long-term expenses like higher studies or skill development.

How Children’s Mutual Funds Differ From Regular Mutual Funds

As the name suggests, the Solution Oriented Mutual Funds category is meant for those investing with a clear purpose. Unlike regular equity or hybrid funds that focus only on returns or asset allocation, these schemes combine:

• Financial structure

• Behavioural discipline

• Goal-focused investing

According to Sanjiv Bajaj, Joint Chairman & MD, Bajaj Capital Ltd.:

“Most funds use a calibrated mix of equity and debt, gradually reducing risk as the goal approaches… every rupee invested carries emotional weight and long-term purpose.”

This blend of discipline, structure, and clarity sets children’s funds apart from conventional schemes.

Children’s Day Special 2025: How To Choose the Right Children MF

Parents should evaluate:

• Asset allocation

• Past performance

• Fund manager’s track record

• Expense ratio

• Portfolio consistency

• AUM stability

Bajaj explains that funds maintaining a balanced equity–debt mix navigate market cycles better.

He also urges choosing funds with disciplined risk management rather than “aggressive return chasing.”

Ranjit Jha (CEO) of Rurash Financials adds:

“Given the long-term nature of these investments, consulting a qualified advisor is ideal. A professional can recommend funds aligned with your financial situation and goals.”

(Fixed Link: Ranjit Jha (CEO))

Why Solution-Oriented MFs Are Relevant

While there are several mutual fund categories, solution-oriented funds like Children MF create a mandatory behavioral framework.

• The compulsory lock-in discourages premature withdrawals

• Ensures money stays untouched for a child’s future

• Aligns perfectly with long-term goals:

  • Higher education

  • Overseas studies

  • Skill development

Starting early ensures that even small monthly contributions grow into a meaningful corpus over 15–18 years, benefiting from market compounding and volatility absorption.

 notes that experienced investors already comfortable with equity or MFs can achieve similar outcomes through broader fund categories that match their risk profile.

Explore More Insights

For deeper insights into goal-based investing, child education planning, and behavioral finance frameworks, explore:
Read the Full article at –  https://rurashfin.com/media/https-rurashfin-…-funds-explained/ ‎