Now as the year has come to an end, most people must have received promotions or yearly bonus. At the same time, we might be very confused as to what to do with this money. Whether to opt for fixed deposits where returns are low, gold and real estate which have hardly given any return or equities which come with volatility attached.
These issues are common in an investor’s life. Therefore, in this article, we will look at the ten best mutual fund lump sum investments that can be made this year to fulfill your desires.
Let’s begin!
In this article
- 10 Best Mutual Funds for Lump Sum Investment – Details
- 1. ICICI Prudential Bluechip Fund Direct
- 2.Mirae Asset Emerging Bluechip Fund – Direct
- 3. Axis Focused 25 Fund – Direct
- 4.Reliance Large Cap Fund – Direct
- 5.Kotak Emerging Equity Scheme – Direct
- 6.Tata Equity P/E Fund – Direct
- 7.HDFC Small Cap Fund – Direct
- 8. Aditya Birla Sun Life Tax Relief 96 – Direct
- 9. SBI Banking & Financial Services Fund
- 10.UTI Nifty Index Fund – Direct
- Major Benefits of Lumpsum Investment
- Conclusion
10 Best Mutual Funds for Lump Sum Investment – Details
1. ICICI Prudential Bluechip Fund Direct
Rated 5 star by Groww; this fund stands out form rest of its peers not just in terms of returns but also in the amount of minimum investment to be made. The expense ratio for the fund is low and the volatility too is lower than the benchmark.
Key Information about the Fund:
| AUM (Size) | 16,539 crores |
| Minimum SIP | 100 |
| Minimum First Investment | 100 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY 100 TRI over long periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 1.21% |
| Turnover | 123% |
| Exit Load | If the fund is redeemed between 0 to 1 year, exit load is 1% |
| Type | Large Cap |
| Fund Manager | S Naren, Rajat Chandak |
The investment objective of the fund is to generate long-term capital appreciation and allocate the income to the shareholders.
The portfolio mainly comprises of equity and equity-related securities of 20 companies in the large-cap space and the rest in debt securities and money market instruments.
The fund manager also follows a guideline to pick stocks from the top 200 stocks in terms of market capitalization from the National Stock Exchange.
The major companies invested in are marquee names such as HDFC Bank Ltd., ICICI Bank Ltd., HDFC Ltd. It also invests in Nifty (Futures) and other money market instruments.
Holding Analysis
2.Mirae Asset Emerging Bluechip Fund – Direct
The following factors make this fund suitable for investments in the long term:-
- The fund has constantly beaten its benchmark;
- The expense ratio of the fund is very low (0.87%);
- The fund has a good mix of large-cap names (HDFC Bank Ltd., ICICI Bank Ltd., RIL, Kotak Mahindra Bank etc.) as well as mid-cap names (Bharat Financial Inclusion Ltd., Tata Global Beverages Ltd.)
- This fund has been one of the top picks for investors in the recent past as well. The Fund Manager too has gained loads of experience in this space.
Key Information about the Fund:
| AUM (Size) | 6,130 crores |
| Minimum SIP | 1000 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY Large Midcap 250 TRI over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 0.87% |
| Turnover | 80% |
| Exit Load | If the fund is redeemed between 0 to 1 year, exit load is 1% |
| Type | Large & Mid Cap |
| Fund Manager | Neelesh Surana |
The investment objective of the fund is to generate maximum capital appreciation for investors.
To achieve the optimal portfolio construction, the fund managers invest in equity and equity-related securities of which the market capitalization at the time of investment is 100 crores.
Holding Analysis
3. Axis Focused 25 Fund – Direct
This fund has a rating of 5 Star by Groww. One of the key things to look at the fund is that in 1 year returns it is still in the green zone.
However, all other funds in the same category and other funds too have fallen drastically in the last year because of the major events such as the NBFC crisis playing out.
Also, read whether the financial crisis of 2008 will repeat itself
This has been possible because the fund has stuck to the top names in the industry some of which are HDFC Bank Ltd., Maruti Suzuki Limited, Avenue Supermarts Ltd., Bajaj Finserv, Pidilite Industries (All of these companies are leaders in their particular sectors)
Key Information about the fund:
| AUM (Size) | 6,455 crores |
| Minimum SIP | 1000 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY 50 Total Return over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 0.77% |
| Turnover | 141% |
| Exit Load | If the fund is redeemed between 0 to 1 year, exit load is 1% |
| Type | Equity Focussed |
| Fund Manager | Jinesh Gopani |
The investment objective of the fund is to put money in equity and equity related securities and not surpass 25 companies in the portfolio.
Holding Analysis
4.Reliance Large Cap Fund – Direct
Investors can surely look into this fund for long-term investing.
As the fund invests in large-cap companies, there is protection from volatility as well. Reliance Large Cap Fund – Direct – Growth has not just beaten its benchmark NIFTY 100 Total Return Index but also other mutual funds in the same category.
Key Information about the fund:
| AUM (Size) | 11,410 crores |
| Minimum SIP | 100 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY 100 TRI over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 1.26% |
| Turnover | 85% |
| Exit Load | If the fund is redeemed between 0 to 1 year, exit load is 1% |
| Type | Large Cap |
| Fund Manager | Ashwani Kumar, Sailesh Raj Bhan |
There are two objectives set by the fund as described below:-
- The main objective is to attain long-term capital appreciation for the investors. This is achieved by investing in equity and equity related instruments of companies whose market capitalization is within the range of BSE 200 Index (highest and lowest combined);
- The second objective or avenue to invest is in the debt and money market securities space.
Holding Analysis
5.Kotak Emerging Equity Scheme – Direct
Even though a mid-cap centered mutual fund, this fund is less volatile than that of its benchmark. The expense ratio for the fund is very low as well.
Therefore, investors who have a high risk appetite and want to enjoy the benefits of mid-cap space can look to invest in this fund for long-term.
Key Information about the fund:
| AUM (Size) | 3,314 crores |
| Minimum SIP | 1000 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY Midcap 100 TRI over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 0.80% |
| Turnover | 35% |
| Exit Load | If the fund is redeemed between 0 to 1 year, exit load is 0% or else it is 1% |
| Type | Mid Cap |
| Fund Manager | Pankaj Tibrewal |
The investment objective of this fund is to look for potential opportunities in the mid and small cap space and thereby generate long term capital appreciation by investing in these stocks (equity and equity related securities)
Holding Analysis
6.Tata Equity P/E Fund – Direct
With a good mix of large caps, mid-caps stocks and at the same time investing in money market funds has rendered Tata Equity P/E Fund to beat the market on a consistent basis.
One major difference is that the exit load is zero percent if redeemed within 18 months thereby motivating investors to save for a longer period of time.
The fund size and expense ratio are low which suggest that the fund has great potential to grow. At the same time, major focus is given to financial services, automobiles and energy sectors which also have a positive outlook going forward.
Key Information about the Fund:
| AUM (Size) | 5,021 crores |
| Minimum SIP | 500 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY 50 Total Return over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 0.97% |
| Turnover | 0% |
| Exit Load | If the fund is redeemed between 0 to 18 months, exit load is 1% |
| Type | Equity Value |
| Fund Manager | Sonam Udasi |
The investment objective of the fund is mainly to provide reasonable and regular income to the investors along with possible capital appreciation.
Holding Analysis
7.HDFC Small Cap Fund – Direct
This fund mainly focuses on investments in the small-cap and mid-cap space.
These spaces had felt the brunt last year in the markets. However, a closer look at the portfolio of these schemes suggests that the businesses are good in terms of fundamentals (such as KEC International, SKF India Ltd., NRB Bearings Ltd., Sharda Cropchem Ltd., NIIT Technologies Ltd.).
Along with this, a small portion is also invested in marquee names such as Aurobindo Pharma Ltd., and safe money market instruments.
Therefore, investors can put their money for long-term in this fund and now is the right time as the fund has corrected last year.
Key Information about the Fund:
| AUM (Size) | 5,672 crores |
| Minimum SIP | 500 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY Smallcap 100 TRI over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 0.71% |
| Turnover | 19% |
| Exit Load | If the fund is redeemed between 0 to 12 months, exit load is 1% |
| Type | Small Cap |
| Fund Manager | Chirag Setalvad |
The investment objective of the fund is to generate long-term capital appreciation for the investors by investing in three major instruments namely:-
- Equity and equity related instruments;
- Money market instruments;
- Equity Derivatives
Holding Analysis
8. Aditya Birla Sun Life Tax Relief 96 – Direct
Investors might also be looking for avenues for tax exemption. Therefore, ELSS funds are best suited for this purpose.
The best advantage in this kind of fund is to inculcate in the investors the habit of long-term saving. This is because the minimum lock in period for ELSS is three years.
Market volatility tends to be low as investment period increases.
Key Information about the Fund:
| AUM (Size) | 6,984 crores |
| Minimum SIP | 500 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY 200 TRI over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 1.06% |
| Turnover | 1071% |
| Exit Load | NIL |
| Type | Equity Linked Savings Scheme (ELSS) |
| Fund Manager | Ajay Garg |
As this is an ELSS fund, the objective of this fund is to provide long term capital growth along with tax exemptions to investors.
The maximum amount of exemption that may be claimed by an investor under ELSS (applicable under section 80C of the Income Tax Act, 1962) is INR 1.5 lakhs.
Therefore, this fund will provide two-fold benefit to the investors which are capital growth and tax benefits.
Holding Analysis
9. SBI Banking & Financial Services Fund
As the fund is focused only in the financial services sector, the risk for this fund is high.
However, firstly to mitigate this risk, the fund managers invest a majority of funds in leaders of the industry such as HDFC Bank, Kotak Mahindra Bank Ltd., ICICI Bank Ltd., Bajaj Finance Ltd., Axis Bank Ltd., Bandhan Bank.
Also, one more thing noticeable is the composition of public sector banks (PSBs) in very less as compared to their private peers.
This enhances the portfolio even further as PSBs are reeling under the pressure of bad loans. At the same time, the market share for private banks is rising steadily for the last few years.
The fund size of the fund is also very small and the avenue for this sector is big. Therefore, investors having faith in India’s growth story and have appetite of investing for long term can think of putting money in this fund.
Key Information about the fund
| AUM (Size) | 493 crores |
| Minimum SIP | 500 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY Financial Services TRI over consistent periods of time |
| Age of the fund | 4 years |
| Expense Ratio | 1.66% |
| Turnover | 84% |
| Exit Load | If the fund is redeemed between 0 to 12 months, exit load is 1% |
| Type | Sectoral/ Thematic |
| Fund Manager | Sohini Andani |
As the name suggests, SBI Banking & Financial Services Fund is engaged in investing in equity and equity related securities of financial services companies and thereby seek long-term capital appreciation.
Holding Analysis
10.UTI Nifty Index Fund – Direct
Investors who have lump sum money but do not want to take a high risk can invest in an index fund.
These funds track the index and hence the volatility of the fund is almost similar to that of the market. Therefore, this fund the money is not exposed much to a particular sector.
Additionally, the expense ratio (0.13%) and fund size (1,056 crores) of the fund is very low.
Also, nowadays, index funds are becoming a popular fund in the investment community. This is because many people are confused about the particular category of mutual fund to invest in.
Therefore they take up an index fund to have suitable returns at market level risk. Investors would also be happy to know that index funds have also been able to beat the returns generated by several large-cap funds.
Key Information about the Fund
| AUM (Size) | 1,056 crores |
| Minimum SIP | 500 |
| Performance w.r.t its benchmark | Has beaten the benchmark NIFTY 50 Total Return over consistent periods of time |
| Age of the fund | 5 years |
| Expense Ratio | 0.13% |
| Turnover | 17% |
| Exit Load | No exit load |
| Type | Index Fund |
| Fund Manager | Kaushik Basu |
As this is an index fund, it aims to invest in stocks in S&P Index in the same weight as in the S&P Index. Owing to the reasons specified above, investors can surely look to put their money in this 5 Star rated fund by Groww.
Holding Analysis
Major Benefits of Lumpsum Investment
There are two major benefits of investing in lumpsum funds:
1. Investing a Big Amount
If you want to invest a big amount in mutual funds, then investing in lumpsum funds should be your go-to strategy.
2. More Convenient
This mode is more convenient if you have a solid amount which you are willing to spread across various securities. If you carry out this process through the SIP mode, you will have to make sure that you invest your money at regular intervals.
Conclusion
The above funds have performed exceedingly well in the past and owing to market correction time to ripe to make lump sum investments in these funds.
However, we as investors should be aware that choice of funds should be in terms of risk appetite and needs (such as only capital appreciation, both appreciation and tax benefits etc.).
The other factors such as expense ratio, fund size, fund managers should also be looked at before making a long term choice for investments.
Hope you all have a year full of market-beating returns!
Happy Investing!
Disclaimer: The views expressed in this post are that of the author and not those of Groww
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