Best Mutual Funds for Lump Sum Investments 2025

In the recent past, investing through a systematic investment plan (SIP) has gained significant popularity. However, a lump sum investment is still a viable option for investors and offers multiple benefits. In order to make the most of your lump sum investment, it is crucial to pick the right mutual fund. In this blog, we will review some of the best mutual funds for lump-sum investments. Read on to learn what factors to look out for while making your lump sum investment decisions.

Best Mutual Funds for Lump Sum Investments in 2025

Based on a 3-year annualised growth rate (as of January 10, 2025), the best mutual funds for lump sum investments are as follows.

The above data was last updated on January 10, 2025

Overview of Best Mutual Funds for Lump Sum Investment

SBI PSU Direct-Growth

• The fund was launched on January 1, 2013
•  Assets under management (AUM) of Rs 4,703 crore
• 3Y annualised returns of 33.27%
• Carries very high risk
• 93.9% of the funds allocated to equity, 6.1% held as cash
• Holdings include companies such as State Bank of India, Power Grid, and GAIL (India)
• Expense ratio of 0.74%

Motilal Oswal Midcap Fund Direct-Growth

• The fund was launched on February 24, 2014
• AUM of Rs 18,604 crore
• 3Y annualised returns of 33.19%
•  Carries very high risk
• 99.4% of the funds allocated to equity, 0.6% held as cash
• Holdings include companies such as Polycab India, Coforge, and Kalyan Jewellers
• Expense ratio of 0.54%

ICICI Prudential Infrastructure Direct-Growth

• The fund was launched on January 1, 2013
• AUM of Rs 6,423 crore
• 3Y annualised returns of 31.68%
• Carries very high risk
• 94.9% of the funds allocated to equity, 3.6% held as cash, and 0.9% held as debt
• Holdings include companies such as Larsen & Toubro, NTPC, and ICICI Bank
• Expense ratio of 1.21%.

Aditya Birla Sun Life PSU Equity Fund Direct-Growth

•  The fund was launched on December 30, 2019
• AUM of Rs 5,895 crore
• 3Y annualised returns of 31.59%
• Carries very high risk
• 95.6% of the funds allocated to equity, 4.4% held as cash
• Holdings include companies such as State Bank of India, NTPC and ONGC
• Expense ratio of 0.53%

LIC MF Infrastructure Fund Direct-Growth

• The fund was launched on January 1, 2013
• AUM of Rs 750 crore
• 3Y annualised returns of 31.39%
• Carries very high risk
• 94.6% of the funds allocated to equity, 5.4% held as cash
• Holdings include companies such as Garware Hi-Tech Films, Shakti Pumps, and REC
• Expense ratio of 0.56%.

ICICI Prudential BHARAT 22 FOF Direct-Growth

• The fund was launched on January 29, 2018
• AUM of Rs 2,183 crore
• 3Y annualised returns of 31.37%
• Carries very high risk
• 99.4% of the funds allocated to equity, 0.6% held as cash
• Holdings include the Bharat 22 ETF - Growth
• Expense ratio of 0.12%.

Invesco India PSU Direct Equity-Growth

• The fund was launched on January 1, 2013
• AUM of Rs 1,435 crore
• 3Y annualised returns of 31.34%
• Carries very high risk
• 95.8% of the funds allocated to equity, 4.2% held as cash
• Holdings include companies such as Bharat Electronics, Power Grid, and Bharat Petroleum
• Expense ratio of 0.85%.

HDFC Infrastructure Direct Plan-Growth

• The fund was launched on January 1, 2013
• AUM of Rs 2,607 crore
• 3Y annualised returns of 30.06%
• Carries very high risk
• 93.6% of the funds allocated to equity, 4.5% held as cash
• Holdings include companies such as ICICI Bank, HDFC Bank, and L&T
• Expense ratio of 1.09%.

DSP India T.I.G.E.R. (The Infrastructure Growth and Economic Reforms Fund) Direct-Growth

• The fund was launched on January 1, 2013
• AUM of Rs 5,645 crore
• 3Y annualised returns of 30.01%
• Carries very high risk
• 93.9% of the funds allocated to equity, 5.3% held as cash
• Holdings include companies such as NTPC, Siemens, and L&T
• Expense ratio of 0.84%.

Bandhan Emerging Businesses Direct-Growth

• The fund was launched on February 25, 2020
• AUM of Rs.8,489 crore
• 3Y annualised returns of 27.09%
• Carries very high risk
• 90.7% of the funds allocated to equity, 9.3% held as cash, and 0.1% held as debt
• Holdings include companies such as LT Foods, PCBL, and Cholamandalam Financial Holdings
• Expense ratio of 0.40%.

Lump Sum Investment: Things to Keep in Mind

Unlike an SIP investment where one invests a fixed sum at regular intervals, under a lump sum investment, one invests a considerably large amount of money in one go. While making a lump sum mutual fund investment, there are certain things to keep in mind. These include:

Investment Horizon

Lump sum investments tend to perform well in the long run. Investors who are considering making lump sum investments should have an investment horizon of 10-15 years.

Market Conditions

One of the most vital aspects of lump sum investments is the prevailing market conditions. Investing at the peaks or the end of a bull run may negatively impact your returns. Before making an investment decision, one should conduct thorough research and analysis about the current market conditions and the possible market conditions in the future.

Risk Profile

A lump sum investment carries significantly higher risk since the money is invested in one go. It is suitable for investors with a larger risk appetite who can bear the impact of short-term volatilities in the market. Moreover, investors should also be aware of the risks associated with the different types of mutual fund schemes such as equity, hybrid, or debt funds.

Liquidity

Investors should consider the liquidity implications of a lump sum investment. Since a large sum of money is invested in one instrument, it restricts liquidity. As a result, reshuffling your portfolio or making additional investments can be challenging. Lump sum investments are suitable for investors who have a large corpus.

Costs

Just like any investment approach, it is necessary to know the costs and fees associated with lump sum investments. While investing a large sum, costs such as the exit load, expense ratio, and account management fees can have a significant impact on your profits.

Advantages of Lump Sum Investments

Making a lump sum investment in a mutual fund offers various benefits:

• Lump sum investing is a simple process and offers higher convenience as a transaction takes place only once.
• Since there are no regular transactions or withdrawals, the associated costs are limited.
• If done correctly, lump sum investments can offer significant capital appreciation in the long term.

Limitations of Lump Sum Investments

Following are the limitations of lump sum investments:

•  Lump sum investments are vulnerable to short-term market fluctuations making market conditions and timing important factors.
• Unlike investing through an SIP, a lump sum investment does not offer investors benefits such as cost-price averaging, flexibility, and mitigation of risk.
•  Lump sum investments require a larger capital which may lead to liquidity constraints.

Conclusion

Lump sum investments in mutual funds can be a viable option to park your money. However, investors should be aware of the risks and liquidity constraints that come along with it. It is important for one to conduct thorough research about the market conditions to time their entry and also select the best mutual funds for lump sum investments.