Union Children's Fund: Investment for your children's future

Your children's future is one of the most important aspirations in life. Your child has the right to dream big and you should support their dreams. But as a parent you have to be realistic. You need to think about how much you need to save and invest to help your child fulfil his / her aspirations.

In this article, we will review the Union Children's fund which has caught our attention as a good fund to build long term wealth targeted at your child's future monetary plans. If you had invested Rs 1 lakh in the fund at its inception it would have grown to 1.3X in less than 2 years, that too in a period, which was difficult for equity market in India. The fund ranks among the top 3 children's funds in the last 3 months, 6 months and 1 year periods.

The rising cost of education and need for education planning

As per an insurance survey, 35% of parents worry that they may not be able to fund their children's higher education. Rising cost of higher education is the primary concern. Cost of higher education for courses like MBA, Medical, Engineering and Law are increasing at 10%. Assuming a similar trajectory of increase, a course which costs Rs 15 - 20 lakhs at current prices now will cost Rs 60 - 80 lakhs 15 years later. If you are planning high quality foreign education for your child, then the cost will be several times higher than that in India. Returns from traditional fixed income investments may not be sufficient to meet your child's financial goals. Further, the interest rates have been declining over the past 20 years and are expected to fall further. Children's funds have emerged as a convenient option for investors to save and build wealth for their children.

Since June 2023, SEBI has allowed parents / legal guardians to invest in mutual funds for their children from their own bank accounts (parents / guardians bank accounts) or a joint account of the minor child with the parent / legal guardian. Earlier investment in your child's name was allowed only from the child's bank account. The regulatory has made it very convenient for parents to start investing in this fund without going through the hassle of opening a bank account in your child's name.

Union Children's Fund

The Union Children's Fund is an open-ended fund for investment for children having a lock-in for at least 5 years or till the child attains adulthood (whichever is earlier). The lock-in period will enforce discipline towards one of the most important life-stage goals for parents. The fund was launched in December 2023 with an objective to generate long term capital appreciation by investing in a mix of securities comprising of equity, equity related securities and debt instruments. The fund has given a return of 13.94% in a little less than 2 years since its inception. The Union Children's fund is managed by Co-fund managers Gaurav Chopra, Vinod Malviya and Parijat Agarwal.

Outperformed the broad market index

The chart below shows the growth of Rs 10,000 lump sum investment in the Union Children's Fund versus the broad market index, Nifty 500 TRI since the inception of the fund.

Source: Advisorkhoj research as on 10^th Nov 2025

Outperformed category average Performance

Union Children's Fund outperformed the category (Children's Funds) average returns over several time periods (see the chart below).

Source: Advisorkhoj research as on 10^th Nov 2025

Portfolio Construct

The Union Children's fund is large cap biased with 42.59% allocation to this market cap. Midcap and small cap allocations are 22.37% and 32.28% respectively.

Source: Fund Factsheet as on 30^th September 2025

Who should invest in Union Children's Fund?

• Investors seeking to invest in fund dedicated for their children e.g. education planning etc


• Investors with minimum 5 year investment horizon


• Investors with high risk appetites


• Investors can invest either in lump sum or through SIP depending on their investment needs.

Consult with your financial advisor or mutual fund distributor, to find out if the Union Children's fund aligns with your investment needs.