Best Mutual Funds for Lump Sum Investment | North Loop Official Blog
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22 Oct 2020

Best Mutual Funds for Lump Sum Investment

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Introduction -

A lump sum mutual fund investment includes investing a significant sum of money into a particular mutual fund scheme. Lump sum investments are preferred because there are lesser variables involved as compared to SIP or Systematic Investment Plan, and the returns are also usually on the higher side. Read further to find out the best mutual funds for lump sum investments. But before that, let us find out how to use a mutual fund calculator.

How to use a lump sum mutual fund calculator?

A lump sum mutual fund calculator can get used to finding out the estimated returns on your mutual fund investment.

Types of returns and benefits of using a lump sum mutual Such fund calculator -

The types of returns for a lump sum investment are as follows -

Absolute return
Total return
Annualized return
Point to point return
Trailing return
Rolling return

Benefits of using a lump sum mutual fund calculator are as follows -

It helps to calculate the estimated returns for the whole investment period.
It is convenient and easy to use.
It helps in calculating reasonably accurate estimates.
It helps in planning finances better by providing an estimate of the return you are most likely to receive at the end of the investment period.

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Benefits of Lumpsum Investment -

It allows you to invest a significant sum of money at once.
It is more convenient if you want to spread a large chunk of money across various securities.

Best Lumpsum Mutual Funds for 2020 -

The best lumpsum mutual funds for 2020 are as follows -

Best Mutual Fund for Lumpsum (Equity) -
   
Fund   name   
   
Fund   type   
   
5   YR Returns   
   
Axis Bluechip Fund   
   
Large   cap   
   
10.6%   
   
DSP   BlackRock Midcap Fund   
   
Mid   cap   
   
10.5%   
   
SBI Small Cap Fund   
   
Small   cap   
   
12.5%   
   
Parag   Parikh Long-term Equity Fund   
   
Multi   cap   
   
13.9%   
   
Canara   Robero Equity Tax Saver   
   
ELSS   
   
10%   


Best Mutual Fund for Lumpsum (Debt) -

Fund name

Fund type
   
1   YR Returns   

Aditya Birla Sunlife Savings Fund

Ultra short term
   
7.4%   

HDFC Short Term Debt Fund

Short term
   
11.2%   

TATA Liquid Fund
   
Liquid   
   
4.8%   


Best Mutual Fund for Lumpsum (Hybrid) -

Fund name

Fund type

3 YR Returns

Canara Robeco Equity Debt Allocation Fund
   
Balanced   
   
7.6%   

Mirae Asset Hybrid Equity Fund
   
Aggressive   
   
5.8%   

ICICI Prudential MIP 25
   
Conservative   
   
7.5%   

Differences between lump sum mutual fund investment and SIP -

You can invest in mutual funds either through SIP or in a lump sum manner. The choice between the two depends on your preference and style of investment. If you opt for lump sum investment, you can deposit all your money at once. On the other hand, SIP involves depositing money at periodic intervals. While the former is more suitable if you have an idle amount and a high-risk appetite, SIP can get chosen if you want to make small deposits over an extended period. In case of SIP investment, you can accumulate more mutual fund units even during a market fall which you cannot do in case of a lump sum mutual fund investment. Experts also claim that SIP averages out the purchase price and minimize the risk of investing during a market high, unlike that in a lump sum investment. While both have their advantages and disadvantages, professionals recommend doing a thorough analysis of personal financial investment goals and fund requirements or needs. For example, if you do not want to take the hassle of keeping track of the amount to be invested every month and the changing NAV, you can opt for a lump sum investment.

Conclusion -

Lump sum mutual fund investments are widely used and have often proven to yield high returns. However, like with every investment, it is crucial to assess the choice of your mutual funds based on risk appetite, capital appreciation, tax benefits, fund size, expense ratio etc. If you want to invest in mutual funds online, you can do so on North Loop. We offer a digital platform where you can invest directly or take the help of our professional mutual fund advisors and even track the performance of your investments. The process is straightforward, and our app is user-friendly.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.