Best Mutual Funds for Lumpsum Investment in India 2024: Top One-Time Investment Plans
Investing a substantial sum in a mutual fund in one go, known as lumpsum investment, is a strategic approach. Whether you’ve received a windfall, a bonus, or experienced a financial gain, this method allows you to invest a significant amount at once. However, considering market fluctuations, timing is crucial when opting for lump sum investments. Yet, specific mutual funds are well-suited for this approach. In this blog, we will identify the best mutual fund for lumpsum investments in India and outline the key factors to guide your selection. Choosing the right mutual fund for lump sum investment is pivotal for portfolio diversification and long-term returns optimisation. With numerous options in the market, identifying the ideal scheme may seem daunting.
List of Best Mutual Funds for Lumpsum Investment in India for 2024
Here is the list of the best mutual funds for lumpsum investment based on their 5-year CAGR, sorted from highest to lowest:
| Fund Name | Fund Category | 3Y CAGR | 3Y Avg Annual Rolling Returns | 5Y CAGR |
|---|---|---|---|---|
| Quant Small Cap Fund | Small Cap Fund | 35.61 | 52.38 | 43.52 |
| Quant Infrastructure Fund | Sectoral Fund - Infrastructure | 37.70 | 48.37 | 38.45 |
| Quant Mid Cap Fund | Mid Cap Fund | 35.79 | 40.91 | 37.16 |
| Bank of India Small Cap Fund | Small Cap Fund | 28.61 | 38.76 | 35.67 |
| Quant ELSS Tax Saver Fund | Equity Linked Savings Scheme (ELSS) | 28.47 | 38.44 | 35.30 |
| Nippon India Small Cap Fund | Small Cap Fund | 34.13 | 44.09 | 34.23 |
| Quant Flexi Cap Fund | Flexi Cap Fund | 29.17 | 37.66 | 33.84 |
| Canara Rob Small Cap Fund | Small Cap Fund | 29.08 | 39.38 | 32.64 |
| Quant Active Fund | Multi Cap Fund | 26.25 | 34.62 | 32.26 |
| Invesco India Infrastructure Fund | Sectoral Fund - Infrastructure | 37.37 | 37.42 | 32.24 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data on the list is from 14th June, 2024. This data is derived from the Tickertape Mutual Funds Screener.
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Top 10 Mutual Funds for Lumpsum Investment: An Overview
Here is a brief overview of the 10 best mutual funds for lumpsum listed above:
Quant Small Cap Fund
Quant Small Cap Fund’s net asset value (NAV) for the growth option in its regular plan stands at Rs. 263.27. The fund’s trailing returns are 64.42% over 1 year, 33.35% over 3 years, 41.13% over 5 years, and 13.47% since its launch. The fund manages assets worth Rs 20,164.09 cr., with an expense ratio of 0.64%. An exit load of 1% applies if redeemed within a year. The minimum investment is Rs 5,000, with minimum SIP investment of Rs 1,000.
Quant Infrastructure Fund
Quant Infrastructure Fund’s net asset value (NAV) for the growth option of its regular plan is Rs 42.49. The fund’s performance over various periods is impressive, with trailing returns of 79.59% over 1 year, 35.1% over 3 years, 36.18% over 5 years, and 8.93% since its launch. The fund manages assets worth Rs 3,564.61 cr. with an expense ratio of 0.66%. An exit load of 0.50% applies if redeemed within 3 months. The minimum lumpsum investment is Rs 5,000, and the minimum SIP investment is Rs 1,000.
Bank of India Small Cap Fund
Bank of India Small Cap Fund has a net asset value (NAV) of Rs 44.57 for its growth option. The fund’s trailing returns are 46.84% over 1 year, 25.73% over 3 years, 32.26% over 5 years, and 30.69% since launch. The fund manages assets worth Rs. 6,920.17 cr., with an expense ratio of 0.62%. An exit load of 1% applies if units beyond 10% of the investment are redeemed within 1 year. The minimum lumpsum investment required is Rs 5,000, and a minimum SIP investment of Rs 1,000.
Quant ELSS Tax Saver Fund
Quant ELSS Tax Saver Fund’s growth option under its regular plan has a net asset value (NAV) of Rs. 393.92. The fund’s trailing returns are 59.25% for 1 year, 26.54% for 3 years, 32.76% for 5 years, and 16.35% since its inception. The best mutual fund to invest one-time manages assets worth Rs 9,360.89 cr. with an expense ratio of 0.77%. There is no exit load for this fund. The minimum investment required is Rs 500, the same amount for additional SIP investments.
Nippon India Small Cap Fund
Nippon India Small Cap Fund’s net asset value (NAV) for the growth option of its regular plan is Rs. 166.55. The fund’s trailing returns are 51.73% over 1 year, 32.06% over 3 years, 31.72% over 5 years, and 22.39% since launch. The fund manages assets worth Rs 51,566.11 cr. with an expense ratio of 0.68%. An exit load of 1% applies if redeemed within 1 year. The minimum investment required is Rs 5,000, and the minimum SIP investment is Rs 100.
Quant Flexi Cap Fund
Quant Flexi Cap Fund’s net asset value (NAV) for the growth option in its regular plan is Rs 104.25. The fund’s trailing returns are 60.45% for 1 year, 27.58% for 3 years, 32.05% for 5 years, and 16.08% since launch. The fund manages assets worth Rs 5,562.88 cr. with an expense ratio of 0.59%. An exit load of 1% applies if redeemed within 15 days. The minimum investment is Rs 5,000, and a minimum SIP investment of Rs 1,000.
Canara Rob Small Cap Fund
Canara Robeco Small Cap Fund has a net asset value (NAV) of Rs 38.16. The fund’s performance over various periods is as follows: 39.64% over 1 year, 25.92% over 3 years, 29.23% over 5 years, and 27.78% since its inception. The fund manages assets worth Rs 10,429.89 cr, with an expense ratio of 0.42%. If redeemed within 1 year, an exit load of 1% applies. The minimum investment is Rs 5,000, and SIPs requiring at least Rs 1,000.
Quant Active Fund
Quant Active Fund, offered by Quant Mutual Fund, is a Multi-Cap mutual fund. With assets under management (AUM) of ₹9,790.64 crores, it is a medium-sized fund in its category. The fund has an expense ratio of 0.62%, similar to other Multi-Cap funds. Over the past year, it has achieved returns of 55.35%, and since its launch, it has averaged 22.58% annual returns. Notably, the fund has generated 2x returns every two years.
Invesco India Infrastructure Fund
Invesco India Infrastructure Fund’s net asset value (NAV) for the Growth option of its Regular plan is Rs 67.04. It has shown trailing returns of 82.47% over 1 year, 36.41% over 3 years, 30.97% over 5 years, and 12.16% since its launch. The fund manages assets worth Rs 1,063.01 cr with an expense ratio of 0.79%. If redeemed within a year, an exit load of 1% applies to units exceeding 10% of the investment. The minimum lumpsum investment is Rs 1,000, and the minimum SIP investment is Rs 500.
How to Invest Lumpsum Amount in Mutual Funds?
Understanding how the best mutual funds operate is crucial for making informed decisions when exploring the realm of lumpsum investments. These funds leverage a strategic approach to deploying large, one-time investments. Unlike systematic investment plans (SIPs), lumpsum investments involve committing a substantial amount upfront.
The top-performing mutual funds in this category carefully allocate funds across a diversified portfolio, aiming for optimal returns. They often focus on a mix of equities, debt instruments, and other assets to balance risk and reward. Rigorous market analysis, skilled fund management, and proactive adjustments to market trends are hallmarks of these funds, ensuring they adapt to the dynamic investment landscape.
Investors can benefit from the potential for higher returns and faster capital appreciation, making lumpsum investments in mutual funds an attractive option for those looking to deploy a significant amount of capital efficiently. As you explore your investment options, keep an eye on historical performance, fund objectives, and the expertise of fund managers to align your lumpsum investment strategy with your financial goals.
What are the Best Mutual Funds for Lumpsum Investment?
Investing a lump sum in mutual funds means committing a substantial amount of money in a single transaction, differing from the regular contributions of systematic investment plans (SIPs). This approach involves buying fund units at the current Net Asset Value (NAV), calculated by dividing the total fund assets by outstanding units. Opting for a lump sum method allows investors to enter the market with a significant investment, potentially capitalising on market trends and fund performance.
This strategy suits those with substantial savings, sizable inheritances, bonuses, or specific financial goals. It offers accelerated wealth growth, capital appreciation, and portfolio diversification.
Recognising that mutual funds provide diverse options like equity, debt, and balanced funds, each with distinct risk-reward profiles, objectives, and asset allocation strategies is crucial. Therefore, aligning your investment goals, risk tolerance, and time horizon with a fund’s characteristics is vital when selecting the best mutual fund for one time investment in mutual funds.
Benefits of Investing in the Best Mutual Fund for Lumpsum Investments
Exploring the realm of lumpsum investments through mutual funds unveils several advantages worth considering:
- Enhanced Returns: Opting for top-tier mutual funds ensures a strategic approach to potentially amplify returns, maximising the efficiency of your lumpsum investment.
- Diversification: The best mutual funds spread investments across diverse sectors, mitigating risk and fostering potential long-term growth by avoiding overreliance on a single asset class.
- Professional Fund Management: Proficient fund managers with leading mutual funds bring expertise. Consequently by consistently analysing market dynamics to make informed decisions on your investment.
- Transparent Performance Metrics: Regular updates and detailed reports will keep you abreast of your investment’s performance, fostering transparency and providing insights into the trajectory of your lumpsum investment.
- Liquidity and Adaptability: The liquidity and flexibility offered by top mutual funds enable easy access to your funds. Consequently, allowing you to navigate changing financial requirements with agility.
What are the Returns on the Best Mutual Fund for Lumpsum Investments & How are they Calculated?
Calculating returns is crucial when evaluating the performance of the best mutual funds for lumpsum investments. Understanding this process empowers investors to make informed decisions. The returns on these funds are determined by assessing the Net Asset Value (NAV) change over a specific period.
Here’s a simplified breakdown of the calculation:
- Initial NAV: The investment begins with the lumpsum amount at the prevailing NAV. This marks the starting point for return calculations.
- Final NAV: At the end of the investment period, the NAV is reassessed. The difference between the initial and final NAV reflects the capital appreciation or depreciation.
- Dividends and Distributions: Some funds may offer dividends or distributions. These should be factored into the total returns.
- Time Factor: Returns are annualised to provide a standardised measure. This helps in comparing the performance of mutual funds with different investment durations.
How to Choose the Best Mutual Fund for Lumpsum Investments for investing?
When making lumpsum investments, selecting the right mutual fund is crucial for maximising returns and minimising risks. Follow these key steps to ensure you pick the best mutual fund for your lumpsum investment:
- Define Your Financial Goals: Start by clearly outlining your financial objectives. Whether your goals are wealth creation, long-term growth, or short-term gains, knowing your goals will guide your mutual fund selection.
- Assess Risk Tolerance: Understand your risk appetite. Different mutual funds carry varying levels of risk. Evaluate your comfort with market fluctuations and choose a fund that aligns with your risk tolerance.
- Research Fund Performance: Analyze the historical performance of potential mutual funds. Look for consistent returns over different market conditions. A track record of steady growth is a positive indicator.
- Diversification Matters: Opt for mutual funds that offer diversification across sectors and asset classes. This helps spread risk and enhances the potential for returns.
- Fund Manager Expertise: Evaluate the fund manager’s expertise and experience. A seasoned manager with a successful track record is likely to make more informed investment decisions.
- Expense Ratio Consideration: Pay attention to the expense ratio, as lower fees can significantly impact your overall returns. Choose funds with reasonable expenses to optimise your investment.
- Check for Exit Load: Be aware of any exit loads associated with the mutual fund. Some funds charge fees for redeeming units within a specific time frame. Factor this into your decision-making process.
Who Should Invest in the Best Mutual Fund for Lumpsum Investments?
The best mf for lumpsum investments are tailored for specific investor profiles. If you fall into any of the following categories, these funds might be the ideal choice for you:
- Sudden Wealth Recipients: Individuals who have received a windfall, such as a bonus, inheritance, or property sale, can benefit from the immediate growth potential of lump sum investments.
- Experienced Investors: If you’re well-versed in market trends and have a knack for strategic investment decisions, lump sum funds provide an opportunity to capitalise on your expertise.
- Risk-Tolerant Individuals: Investing the best lumpsum investment plans requires a higher risk tolerance, as the investment isn’t spread out over time. Investors comfortable with market fluctuations may find these funds suitable.
- Long-Term Investors: While lump sum of money investments can generate quick returns, they are most beneficial for individuals with a long-term financial outlook, allowing them to weather short-term market fluctuations.
Risks Involved While Investing in the Best Mutual Fund for Lumpsum Investments
Embarking on a lump sum investment journey in top mutual funds holds the potential for robust returns, yet navigating the associated risks is crucial. Here’s a comprehensive look:
- Market Volatility: Even the best-performing funds are susceptible to short-term losses owing to unpredictable market fluctuations. A sudden downturn can impact the fund’s value.
- Economic Factors: Unforeseen economic changes, whether on a global or local scale, can significantly influence the fund’s performance. External factors such as interest rate fluctuations or geopolitical events can also impact returns.
- Unforeseen Events: Unexpected events, such as natural disasters or global crises, can have an immediate and adverse effect on the fund’s value. These unforeseen circumstances are beyond the fund manager’s control but can impact investor returns.
- Management Changes: Shifts in fund management, whether due to retirements, resignations, or strategic decisions, can introduce uncertainties. A change in leadership may alter the fund’s investment strategy, potentially impacting its performance.
Taxability on the Best Mutual Fund for Lumpsum Investments
Understanding the tax implications is crucial when exploring the world of lumpsum investments. The best mutual funds for lumpsum investments offer potential returns but come with varying tax structures. Being aware of these tax implications is essential for making informed financial decisions.
- Capital Gains Tax:
| Short-Term Capital Gain Tax | Short-term capital gains tax doesn’t apply to long-term funds since these investments are held for over a year. |
| Long-Term Capital Gain Tax | Long-term capital gains tax on investments in long-term funds is a flat 10% without indexation benefits if held for more than a year. However, gains up to ₹1 lakh are exempt from tax. After this exemption, the standard tax rate applies. |
- Dividend Distribution Tax (DDT): The dividend distribution tax applies to mutual funds that declare dividends. However, it’s important to note that the mutual fund bears this tax before distributing dividends. Investors typically receive their dividends after the DDT deduction.
- Indexation Benefits: Long-term capital gains can benefit from indexation, which adjusts the investment’s purchase price based on inflation. This adjustment helps reduce taxable gains, potentially resulting in a lower tax liability.
Factors to Consider Before Investing in the Best Mutual Fund for Lumpsum Investments
When delving into the world of lump-sum investments, it’s crucial to consider various factors that can significantly impact the performance of your chosen mutual fund. Here’s a concise breakdown of key considerations:
Market Timing:
- Optimal Market Entry: The ideal time to deploy a lump sum into mutual funds is when market conditions are at their nadir but displaying signs of future growth. This strategic move capitalises on potential upswings, maximising returns for investors.
- Caution in Booming Markets: Exercising prudence is essential when the market is flourishing. Entering with a lump sum during the peak performance of even the best lumpsum investment options in India might lead to suboptimal returns or even losses. Stay vigilant and evaluate the market landscape before making significant investment decisions.
Long-Term Commitment
- Best for the Long Haul: Lumpsum investment options shine when viewed as long-term mutual funds for lumpsum investment. The potential benefits become substantial if you can commit your lump sum for an extended period, especially five years or more. The longer the horizon, the greater the potential for wealth accumulation.
- Decade-Long Rewards: Moving further, holding onto your investment for a decade or more can unlock tremendous benefits. The power of compounding and the resilience of well-chosen mutual funds can lead to impressive returns over an extended duration.
To Wrap It Up. . .
After reviewing the list of the top 10 mutual funds for lumpsum investments based on their returns and other fundamentals, interested investors can do their due diligence. They can analyse fund traits, align investments with their financial goals, and seek professional advice for informed decision-making!
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Frequently Asked Questions (FAQs) on the Best Mutual Fund for Lumpsum Investment
In the ideal case, staying invested for the long term can help you reap the benefits of compounding. Therefore, staying invested for the long haul can generate higher returns than staying invested for the short term.
The best mutual funds for lump sum investments typically invest in a diversified portfolio of stocks, bonds, and other securities.
The returns on the best mutual funds for lumpsum investments vary and depend on market conditions. Our list shows they can range from 5Y returns of 8% to 29%.
You may consider a lumpsum investment when you have a substantial amount to invest or an investment goal that you feel comfortable achieving through mutual fund schemes.
There’s no lock-in period for lumpsum investment in mutual funds.
This is an educational list of the top 3 mutual funds for lumpsum investment in 2024:
1. Quant Small Cap Fund
2. Quant Infrastructure Fund
3. Bank of India Small Cap Fund
Note: The data in the list has been taken on 14th June.
Investing in a lumpsum carries market timing risks. It involves committing funds at a particular moment, possibly when the market is overvalued or undervalued.
