The Lumpsum Mutual Funds Investment refers to an amount of money that is large. You can invest thousands, lakhs, or any other large amount at once. Mutual funds offer the option of investing in a lump sum if an investor wishes to invest a significant amount at once. Let's take a look at the best mutual funds in 2023 for lumpsum investments.
What are the Types of Lumpsum Mutual Funds Investment?
- Equity mutual funds
- Debt mutual funds
- Hybrid mutual funds
What to Consider Before Lumpsum Mutual Funds Investment?
-
Money Invested in a Large Amount
A lumpsum Mutual Funds investment can allow you to invest a large sum. Thus, the investment’s value grows as the market grows.
-
A Long-Term Investment is Best Option
Putting money in mutual funds will be a better choice if you keep it for a decade or more; if you keep it for five years or more, the benefits will be enormous.
-
Market Predictions
The best time to invest your lump sum money in mutual funds is when the market is at its lowest point but showing signs of growth and progress. However, you should avoid lump-sum investments in Mutual Funds if the market is performing well and you may find yourself in a losing situation if the market is excelling and maximizing.
The Best Lumpsum Mutual Funds Investment
-
Canara Robeco BlueChip Equity Fund Direct-Growth
As one of the Best Lumpsum Mutual Funds investment, Canara Robeco BlueChip Equity Fund Direct-Growth is a scheme launched by Canara Robeco Mutual Fund. Through investing in large market capitalization companies, the fund seeks to provide capital appreciation.
-
Baroda BNP Paribas Large Cap Fund Direct-Growth
Among the best lumpsum investment plans, Baroda BNP Paribas Large Cap Fund Direct-Growth is offered by BNP Paribas Mutual Fund. In order to generate long-term capital growth, the Scheme invests primarily in large market capitalization companies in a diversified and actively managed portfolio of equity and equity-related securities.
-
UTI Nifty200 Momentum 30 Index Fund Direct-Growth
There are several “Other” Mutual Fund Schemes launched by UTI Mutual Fund, including the UTI Nifty200 Momentum 30 Index Fund Direct-Growth. The scheme aims to provide returns that, before expenses, closely match the total returns of the securities as represented by the underlying index.
-
Nippon India Credit Risk Fund Direct-Growth
In addition to debt instruments with maturities greater than 1 year, the company will invest in cash, call money and reverse repo instruments as well as debentures with maturities shorter than 1 year.
-
HDFC Credit Risk Debt Fund Direct-Growth
A debt mutual fund scheme launched by HDFC Mutual Fund is HDFC Credit Risk Debt Fund Direct-Growth. The fund invests primarily in AA and below-rated corporate debt to generate income/capital appreciation. The fund is one of the best mutual funds in India for lump sum investments.
-
ICICI Prudential Regular Savings Fund Direct-Growth
This hybrid mutual fund scheme is offered by ICICI Prudential Mutual Fund. By investing in the money market and debt instruments, the scheme aims to generate long-term capital appreciation.
-
Aditya Birla Sun Life Equity Hybrid 95’ Fund Growth
One of the best lumpsum investment options is Aditya Birla Sun Life Equity Hybrid ’95 Fund Growth, a hybrid mutual fund scheme launched by Aditya Birla Sun Life Mutual Fund. By investing in equity, debt, and money market securities, the scheme seeks to generate long-term growth of capital and current income. A secondary objective is to generate income and distribute dividends.
-
ICICI Prudential Equity & Debt Fund Growth
An ICICI Prudential Hybrid Mutual Fund Scheme, ICICI Prudential Equity & Debt Fund Growth offers diversified investing opportunities. The investment objective. By investing in equities, fixed income, and money market securities, the scheme seeks to generate long-term capital appreciation and current income.
-
Quant Absolute Fund Direct-Growth
A Hybrid Mutual Fund Scheme introduced by Quant Mutual Fund is Quant Absolute Fund Direct-Growth. With a mix of fixed income securities and equity instruments, the scheme aims to provide long-term capital appreciation and current income over the long term.
What are Best Mutual Funds?
The world of mutual funds offers a vast array of options, each tailored to specific investment objectives and risk tolerances. To determine the best mutual funds for your portfolio, it’s essential to align your investments with your financial goals and the time horizon over which you intend to achieve them.
Mutual funds can be broadly categorised into three primary types based on their underlying assets: equity, debt, and hybrid funds. Each type carries distinct risk profiles and investment objectives, allowing investors to choose the most suitable option.
Equity Mutual Funds
Equity mutual funds are well-suited for investors with long-term horizons, typically five years or more. These funds primarily invest in stocks and are known for their potential to deliver high returns. Within the equity category, there are sub-categories such as large-cap, mid-cap, and small-cap funds. The choice between these depends on your risk tolerance. Large-cap funds invest in established companies with a strong financial position, making them relatively less risky. In contrast, small-cap funds invest in smaller companies with higher growth potential but also higher risk.
Debt Mutual Funds
Debt mutual funds are ideal for investors seeking stability and safety of capital. They primarily invest in fixed-income securities like bonds and provide a steady income stream. Debt funds are generally less volatile compared to equity funds, making them suitable for shorter investment horizons. If you have a financial goal within the next three years, such as buying a car, debt funds can be a more prudent choice to achieve that goal without exposing your investments to significant market fluctuations.
Hybrid Funds
Hybrid funds, as the name suggests, combine elements of both equity and debt. They offer a balanced approach, making them suitable for investors who are risk-averse but still want exposure to equities. These funds are designed to provide diversification and moderate returns.
Your choice of the Mutual Funds investment should be driven by your unique financial objectives. If you have multiple goals with varying timeframes, consider diversifying your investments across different types of mutual funds to align with each specific goal. Ultimately, the best mutual fund is one that complements your investment strategy, risk tolerance, and time horizon, helping you achieve your financial aspirations with confidence.
Top Performing Mutual Funds to Invest In India
| Fund Name | 3-year Return (%) | 5-year Return (%) |
| Quant Small Cap Fund Direct Plan-Growth | 47.04% | 31.03% |
| Quant Infrastructure Fund Direct-Growth | 43.67% | 29.99% |
| Quant Tax Plan Direct-Growth | 36.22% | 28.25% |
| Axis Small Cap Fund Direct-Growth | 34.46% | 28.00% |
| Nippon India Small Cap Fund Direct-Growth | 45.82% | 27.98% |
| Quant Mid Cap Fund Direct-Growth | 40.96% | 27.63% |
| Kotak Small Cap Fund Direct-Growth | 37.51% | 27.07% |
| ICICI Prudential Smallcap Fund Direct Plan-Growth | 39.81% | 27.01% |
| Quant Active Fund Direct-Growth | 33.89% | 26.23% |
| PGIM India Midcap Opportunities Fund Direct-Growth | 30.72% | 26.09% |
How Tax is Applied on Best Mutual Funds in India
When it comes to Mutual Funds investment in India, it’s essential to understand how taxes are applied, as they can significantly impact your returns. Mutual funds offer two primary ways to earn income: through capital gains and dividends. The tax treatment for each of these can vary based on the type of mutual fund and the holding period. Here’s a breakdown of how tax is applied on the best mutual funds in India:
Dividends
- Dividends earned from mutual funds are added to your overall total income.
- The tax on dividend income is determined by your current income tax slab.
- This means that the tax rate for dividends may vary depending on your total income and the tax slab it falls under.
Capital Gains – Equity Funds
- Mutual funds that invest at least 65% of their assets in equity and equity-related instruments are classified as equity funds.
- If you redeem your equity mutual funds investment within one year from the investment date, the gains are considered as Short Term Capital Gains (STCG).
- STCG on equity investments is taxed at a rate of 15%.
Capital Gains – Equity Funds (Long Term)
- If you hold your equity mutual funds investment for more than one year, the gains are classified as Long Term Capital Gains (LTCG).
- LTCG on equity investments is taxed at 10% on the gains exceeding ₹ 1 lakh.
- This tax rate applies after considering the benefit of indexation.
Capital Gains – Non-Equity Funds (Debt Funds, Gold Funds, etc.)
- Non-equity funds include mutual funds with less than 65% allocation to equities, such as debt funds or gold funds.
- Short Term Capital Gains (STCG) on non-equity funds occur when you redeem your investments before three years.
- STCG on non-equity funds is added to your total income and taxed at your current income tax slab.
Capital Gains – Non-Equity Funds (Long Term)
- Long Term Capital Gains (LTCG) on non-equity funds are applicable when you stay invested for over three years.
- LTCG on non-equity funds is taxed at a rate of 20% after applying indexation benefits.
Hybrid Mutual Funds
Taxation of gains from hybrid mutual funds depends on the underlying asset allocation.
If a hybrid fund has 65% or more of its portfolio invested in equities, the gains will be taxed like equity funds.
If the hybrid fund has less than 65% allocation to equities, it will be taxed like debt funds.
Understanding the tax implications of your mutual funds investment is crucial for effective financial planning. It’s advisable to consult a financial advisor or tax expert to make informed investment decisions based on your specific financial goals and circumstances.
Conclusion
It is important for investors to understand their personal risk tolerance and needs when choosing the best lump sum investment plan in 2023 (such as capital appreciation alone, appreciation along with tax benefits, etc.). Selecting a lump sum mutual fund investment plan that fits your investor profile. The expense ratios, fund size, and fund managers should all be considered when investing.
You can also feel confident about your investment decisions by seeking the best legal advisor. The lawyers at Vakilsearch will assist you in deciding on the best investment plans for Mutual Funds Investment.
FAQs
Which is the best mutual fund for lumpsum investment in 2023?
The best mutual fund for a lumpsum investment in 2023 can vary based on your financial goals, risk tolerance, and investment horizon. It's advisable to consult a financial advisor from Vakilsearch to determine the most suitable option for your specific needs.
What is the best investment option in 2023?
The best investment option in 2023 depends on your financial objectives. Common choices include mutual funds, stocks, real estate, and fixed-income instruments. Diversifying your investments across various asset classes can be a prudent strategy.
Will mutual funds go up in 2023?
Predicting the exact future performance of mutual funds in 2023 is challenging. It's crucial to base your investment decisions on your financial goals and risk tolerance, rather than trying to time the market.
Which mutual fund is best to invest in now for a lumpsum investment?
The best mutual fund for a lumpsum investment depends on your individual circumstances. Consider factors like your investment horizon, risk tolerance, and financial goals. Consult a financial advisor from Vakilsearch for personalised recommendations.
Where should I invest my lumpsum for 5 years?
To invest a lumpsum for 5 years, consider options like fixed deposits, debt mutual funds, or diversified equity funds, depending on your risk tolerance and financial objectives.
How to invest 10 lakhs lumpsum in India?
Investing 10 lakhs lumpsum in India offers various options, including mutual funds, fixed deposits, stocks, or real estate. The choice depends on your financial goals, risk tolerance, and investment horizon.
