Lump-sum money is a large chunk of money. It could be thousands, or lakhs, depending on what ‘big’ means for you in the financial context. It may not be possible for you to have lump sum money ready on a regular basis, especially if you are a millennial.
Given how the year has panned, there might be a considerable section of the population (mostly millennials) which may have saved up some money. This is because of reduced expenditure on utility bills and rent.
Nevertheless, such reasons will be different for different people. If you have a large chunk of money, and you are clueless about how to channelise that amount in the most fruitful way possible, best mutual funds for lumpsum investment might be a good option for you.
Mutual funds have a variety of options. There are mutual funds if you are ready to take on some risk for high returns if you want to take lower risk but sill wants the advantage of heightened equity returns. There are also some funds which can guarantee you returns to some extent.
These parameters are common in an investor’s life. Therefore, in this article, we will look at the ten best lump sum investment plan that can be made this year to fulfil your desires.
Disclaimer: The funds have been categorised on the basis of 3-year returns as on January 11, 2021. This list is for information purposes only and is not a recommendation.
In this article
- Equity Funds
- Debt Funds
- Hybrid Funds
- Other Funds
- Major Benefits of Lumpsum Investment
Equity funds are mutual funds that are mandated to invest maximum money in stocks of different companies. They derive their name and categorisation depending on the kind of stocks they are investing in. For example, large-cap funds invest in stocks of large-cap companies.
Here are some of the best lump sum investment plan for equity fund category:
Large Cap Funds
- Axis Bluechip Fund
- Canara Robeco Bluechip Equity Fund
- Edelweiss Large Cap Fund
- LIC MF Large Cap Fund
- BNP Paribas Large Cap Fund
Mid Cap Funds
- Axis Midcap Fund
- PGIM India Midcap Opportunities Fund
- Edelweiss Aggressive Hybrid Fund
- Invesco India Midcap Fund
- DSP Midcap Fund
- Axis Smallcap Fund
- Kotak Smallcap Fund
- SBI Smallcap Fund
- ICICI Prudential SmallCap Fund
- Nippon India Smallcap Fund
- Axis Multicap Fund
- UTI Equity Fund
- Quant Active Fund
- Parag Parikh Long Term Equity Fund
- PGIM India Diversified Equity Fund
- Quant Tax Plan
- Canara Robeco Equity Tax Saver
- Axis Long Term Equity Direct Plan
- Mirae Asset Tax Saver Fund
- JM Tax Gain Plan
Debt funds invest in bonds and money market instruments of companies. There are up to 15 sub-categories under debt funds. Here are some of the best mutual fund for lumpsum investment under the debt fund category:
Top Liquid Funds
- Union Dynamic Bond Fund
- Quant Liquid Direct Plan
- IDBI Liquid Fund
- Franklin India Liquid Fund
- Mahindra Manulife Liquid Fund
Top Banking and PSU Debt Funds
- Edelweiss Banking and PSU Debt Fund
- IDFC Banking and PSU Debt Fund
- Nippon India Banking and PSU Debt Fund
- Kotak Banking and PSU Debt Fund
- SBI Banking and PSU Debt Fund
Top Corporate Funds
- L&T Triple Ace Fund
- HDFC Corporate Bond Fund
- Aditya Birla Sun Life Corporate Bond Fund
- Sundaram Corporate Bond Fund
- Axis Corporate Debt Fund
Ultra Short Term Funds
- PGIM India Ultra Short Term Fund
- ICICI Prudential Ultra Short Term Fund
- DSP Low Duration Fund
- Mahindra Manulife Low Duration Fund
- Aditya Birla Sun Life Savings Fund
Hybrid funds are a combination of equity and debt investments.
Arbitrage Hybrid Fund
- Mahindra Manulife Equity Savings Dhan Sanchay Yojana
- Nippon India Arbitrage Fund
- Edelweiss Arbitrage Fund
- BNP Paribas Arbitrage Fund
- L&T Arbitrage Opportunities Fund
Balanced Advantage Fund
- Edelweiss Balanced Advantage Fund
- Union Balanced Advantage Fund
- ICICI Prudential Balanced Advantage Fund
- L&T Balanced Advantage Fund
- Aditya Birla Sun Life Balanced Advantage Fund
Aggressive Hybrid Fund
- Quant Absolute Fund
- BNP Paribas Substantial Equity Hybrid Fund
- Canara Robeco Equit Hybrid Fund
- Mirae Asset Hybrid Equity Fund
- Sundaram Equity Hybrid Fund
Conservative Hybrid Fund
- Baroda Conservative Hybrid Fund
- Canara Robeco Conservative Hybrid Fund
- Kotak Debt Hybrid Fund
- ICICI Prudential Regular Savings Fund
- BNP Paribas Conservative Hybrid Fund
- DSP World Gold Fund
- Kotak Gold Fund
- Nippon India Gold Savings Fund
- Invesco India Gold Fund
- Quantum Gold Savings Fund
Major Benefits of Lumpsum Investment
There are two major benefits of investing in the best mutual fund for lumpsum:
- 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. This is just a matter of choice for a lot of investors.
This mode is more convenient if you have a solid amount which you are willing to spread across various securities. SIP may not be convenient for those who do not have guaranteed regular income and who receive their money in a scattered manner.
- Compounding Returns
Power of compounding has a strong impact on lumpsum investments. Letting your large chunk of money stay put for a longer time frame, ensures you earn compounded returns if your money appreciates at the end of the return cycle.
The above funds have performed 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 the choice of funds should be in terms of risk appetite and needs (such as only capital appreciation, both appreciation and tax benefits etc.). The best lump sum investment plan for you will be one that suits your investor profile. Returns should not be the reason why you invest or don’t invest in a particular mutual fund plan.
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!
Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.