LIC Mutual Funds - A Complete Guide 2025
Intended to initiate or diversify on your investments in 2025? Very often LIC Mutual Funds are considered the reliable choice, particularly by Indian investors who want to be sure of stability, brand reputation and the availability of various types of investments. But are LIC mutual funds the right choice and how they compare with other available options in the changing financial world?
In this article we have given a detailed overview, real life observations and examples of the prevailing situation. Want to know the features, benefits, challenges and strategies regarding LIC Mutual Funds? Read on.
What Are LIC Mutual Funds and How They Work?
The asset management company (AMC) that is under promotion by the Life Insurance Corporation of India, which is one of the oldest financial bodies of the country, is known as LIC Mutual Fund. Similar to any other mutual fund, LIC Mutual Fund is the pool of money collected by a number of investors, invested in a number of securities like equity, and debt and hybrid, under investment objectives of each scheme.
When you invest in one of their schemes, professional fund managers make decisions on how to dispose money with regard to market research and analysis. The risk, nature, and the return of every fund are dependent on the nature of fund selected.
Important Characteristics or Highlights of the LIC Mutual Funds
- Extensive selection of schemes (equity, debt, hybrid, sector based, ELSS to save taxes, etc.)
- Business processes (easy SIP, online transactions, mobile app access) that are investor-friendly.
- Clear NAV reporting and frequent reporting.
- Supported by the trust and legacy of Life Insurance corporation of India.
- Penetration in Tier 2 and Tier 3 cities via the extensive network of agents of LIC.
What Are the Various Types of LIC Mutual Fund Schemes in 2025?
Until 2025, LIC Mutual Fund has developed and serves various investor profiles through various schemes. A few notable categories are:
- Equity Funds: It primarily invests in stocks of listed corporations and is suitable when a long-term capital growth is needed by the investor. E.g. LIC MF Large Cap Fund, LIC MF Flexi Cap Fund.
- Debt Funds: These are less risky and more stable and invest in government bonds, corporate debt instruments etc., suitable to more conservative investors. E.g. LIC MF Overnight Fund, LIC MF Short Term Fund.
- Hybrid Funds: Balanced risk and middle-of-the-road returns, use in combination with both equity and debt, to get a mix.
- Tax Saving Funds: ELSS (Equity Linked Savings Scheme) is a scheme that provides tax advantages under section 80C with a 3 year lock in.
- Solution Oriented Funds: To achieve a certain purpose such as retirement or children future.
Did you know? In 2025, LIC Mutual Fund has improved its digital KYC and onboarding solution, and first-time investors in small towns could sign-up and invest without issues.
Why Should You Invest in LIC Mutual Funds in 2025?
The attractiveness of LIC Mutual Funds among Indian investors has many reasons that transcend the LIC legacy.
Pros of LIC Mutual Funds
- Brand Equity: The rich history LIC has earned gives investors trust particularly novice mutual fund investors.
- Scheme Diversity: Flexibility of both short term and long term objectives.
- PAN India Reach: Availability via the existing network of agents of LIC, as well as online.
- Stability in Select Funds: Some funds have performed reliably on 5 and 10 year basis.
- Tax Saving Option: ELSS plans for individuals who want to save on income tax.
Cons of LIC Mutual Funds
- Median Performance: Some funds give lower returns compared to private AMCs.
- Reduced Digital Presence (until recently): Digital interface has lagged behind top AMCs.
- Less Aggressive Innovation: Safety sometimes means avoiding high-growth sectoral bets.
People also ask
Q: Can I invest only when I am an LIC policyholder?
A: No. Anybody who fulfills the minimum KYC requirements is allowed to invest in the LIC Mutual Fund schemes.
What is the Comparison Between LIC Mutual Funds and the Other Mutual Funds in India?
| Parameter | LIC Mutual Fund | HDFC Mutual Fund | SBI Mutual Fund | Axis Mutual Fund |
|---|---|---|---|---|
| Strength of the brand | High (trusted, public sector) | High (private, popular) | High (public sector giant) | Medium High (growing fast) |
| Number of Schemes | 28+ | 45+ | 50+ | 30+ |
| Digital Experience | Better (since 2024) | Advanced | Advanced | Highly Digital |
| Mean Equity Returns (5 yrs) | 10-11% | 13-14% | 12-14% | 15-16% |
| Distribution Reach | Pan India through agents and online | Banks, IFAs, online | Banks, Digital | Digital |
| Investor Perception | Secure, reliable | Innovative, growth-based | Credible, government-affiliated | New age, tech-driven |
Expert Review: According to financial coach Priya Menon, LIC MF can provide traditional investors with a way to overcome the trust barrier, and will provide fairly competitive returns once it has overhauled its management team after 2023.
What LIC Mutual Fund Schemes Do Well in 2025?
According to the beginning of 2025, the best performing LIC Mutual Fund schemes are:
- LIC MF Large Cap Fund: 5-year annualized return of 11.4%.
- LIC MF Tax Plan (ELSS): 5-year annualized return of 10.7%.
- LIC MF Short Term Debt Fund: 3-year annualized return of 6.2%.
- LIC MF Flexi Cap Fund: 1-year return of 17.5%.
These figures reflect mediocre performance with some schemes close to private sector equivalents, much of this after LIC MF improved technology and portfolio management.
Key Features for 2025
- Addition of performance analytics and investor dashboard to app.
- More thematic and sectoral funds introduced.
- Improved risk management procedures.
People also ask
Q: How to monitor NAV / performance of LIC mutual fund schemes in real time?
A: NAV and historic performance can be tracked in the official LIC Mutual Fund site or by using the best aggregator sites.
How Do LIC Mutual Funds Invest?
The procedure to initiate a Systematic Investment Plan (SIP) or lump sum investment is simple:
- Full KYC: PAN, Aadhaar, basic data online or offline.
- Select Scheme: According to risk, term, goal.
- Choose Amount and Mode: SIP or lump sum; online banking, UPI or cheque.
- Check Results: Go on mobile app or website. Switch or redeem as needed.
Did you know? In 2025, LIC MF launched a WhatsApp-enabled investing platform making SIPs accessible even in semi-urban areas.
What Are the Major Risks and Problems of Investing in LIC Mutual Funds?
Key Risks
- Market Volatility: Equity schemes are affected by market fluctuations.
- Interest Rate Risk: Debt funds can fall if interest rates rise suddenly.
- Fund Manager Reliance: Returns depend on fund manager expertise.
Common Challenges
- Poorer Returns in Some Schemes: Compared to aggressive private sector funds.
- Need for Awareness: New investors need to research before investing.
People also ask
Q: Is my money safe in LIC Mutual Funds?
A: Investments in all mutual funds are market-linked and not guaranteed, but LIC has a reputation that provides reliability.
What Are the LIC Mutual Funds Charges and Tax in 2025?
Key Charges
- Expense Ratio: 1.0% to 2.2% depending on scheme.
- Exit Load: Usually 1% for equity funds redeemed early.
- No Entry Load: As per SEBI rules.
Taxation Policies
- Equity Fund Gains: Long-term (after 1 year): 10% above ₹1 lakh; Short-term: 15%.
- Debt Fund Gains: Taxed as per income slab if less than 3 years; 20% with indexation otherwise.
- ELSS: Tax deduction under 80C up to ₹1.5 lakh per year.
Professional Opinion: CA Kunal M explains that LIC funds’ expense ratios are similar to top public AMCs, but ELSS remains popular for tax-saving with equity growth.
What Does the Legacy of LIC Mean to Its Mutual Fund Business in 2025?
LIC has a massive insurance client base and penetration across India. But performance of mutual funds depends on portfolio management, not the parent legacy.
Legacy Matters In:
- Rural and elderly adoption.
- Trust building and education.
- Agent accessibility.
Less Important For:
- Fund returns, which rely on markets and fund managers.
People also ask
Q: Will my future scheme returns be higher because of the brand name of LIC?
A: No. Returns depend on markets and fund managers, not brand legacy.
What is the Best Way to Select a LIC Mutual Fund Scheme That Will Suit You?
Steps to select:
- Define Goal: Retirement, child’s education, tax saving, etc.
- Check Risk Profile: Aggressive for growth, conservative for safety.
- Compare Historical Returns: Use 3-year and 5-year data.
- Assess Charges: Lower expense ratio means higher net return.
- Consult Professional: If in doubt.
Selection Must-Ask Questions
- What is the style of investment and risk?
- What is the consistency of returns?
- Will the scheme fit my time horizon?
Did you know? In 2025, LIC MF launched investor webinars and robo-advisory (beta) to help beginners choose funds.
TLDR Quick Recap
- LIC MF provides wide scheme choices, backed by LIC’s trust and digital progress.
- Choose funds based on goals and risk, not just brand.
- Compare past returns, charges, and tax impact.
- Good for stability-seeking investors aiming for moderate returns.
People Also Ask (FAQs)
Q: How much would you need to start a SIP in the LIC Mutual Funds in 2025?
A: Typically, ₹500/month across most schemes.
Q: Do NRIs have access to LIC Mutual Fund?
A: Yes, subject to SEBI rules and documents.
Q: What do I do to redeem my mutual fund units?
A: Online via app/site, or offline via agents.
Q: Are there any lock-in periods of LIC MF schemes?
A: Only ELSS has 3-year lock-in. Others are open-ended.
Q: Will I get regular updates after investing?
A: Yes, via app, SMS, and email.
Sources
- The official Web site of LIC Mutual Fund.
- Morningstar India
- ET Money
- Value Research Online
