fincash logo SOLUTIONS
EXPLORE FUNDS
CALCULATORS
LOG IN
SIGN UP

Fincash » Mutual Funds » Lump Sum Investment in Mutual Funds

Lump Sum Investment in Mutual Funds

Updated on November 6, 2024 , 12118 views

Do you know that you can invest a lump sum amount in Mutual Funds? If yes, then it's good. However, if no, then don’t worry. This article will guide you through the same. Lump sum investment in Mutual Funds refers to a situation when an individual invests money in Mutual Funds at one-time. Here, the deposit does not take place at multiple times. There is a lot of difference between the SIP and lump sum mode of investment. So, let us understand the concept of Lump sum investment in Mutual Funds, best mutual funds for lump sum investment, things to be considered during lump sum investment, Mutual Fund Lump sum return calculator, and other related aspects through this article.

Lump sum Mutual Funds

What do you mean by Lump Sum Investment in Mutual Funds?

Lump sum investment in Mutual Fund is a scenario where individuals invest in Mutual Funds for only once. However, in contrast to SIP mode of investment where individuals deposit small amounts in lump sum mode, individuals deposit a considerable amount. In other words, it is a one-shot technique of Investing in Mutual Funds. Lump sum mode of investing in suitable for investors who have excess funds that are lying ideal in their Bank account and are looking to for channels to earn more Income by investing in Mutual Funds.

Best Mutual Fund for Lump Sum Investment in 2024 – 2025

Before you invest in Mutual Funds through lump sum mode, individuals need to consider various parameters such as AUM, investment amount, and much more. So, based on these parameters some of the best Mutual Funds for Lump sum investment are as follows.

Best Lump Investment in Equity Mutual Funds

Equity Funds are the schemes that invest their corpus in equity and equity-related instruments of various companies. These schemes are considered to be a good option for long-term investment. Though individuals can invest lump sum amount in equity funds yet the recommended technique of investing in equity funds is either through SIP or Systematic Transfer Plan (STP) mode. In STP mode, individuals first deposit a considerable money in Debt fund such as Liquid Funds and then the money is transferred at regular intervals in equity funds. Some of the Equity Mutual Funds that can be considered for investment are as follows.

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2023 (%)
Nippon India Small Cap Fund Growth ₹175.936
↓ -2.46
₹62,260 5,000 1.71641.327.835.848.9
Motilal Oswal Midcap 30 Fund  Growth ₹105.54
↓ -0.79
₹18,604 5,000 8.129.263.43232.241.7
Kotak Small Cap Fund Growth ₹276.819
↓ -4.11
₹18,287 5,000 2.919.539.417.631.234.8
ICICI Prudential Infrastructure Fund Growth ₹190.8
↓ -1.36
₹6,424 5,000 0.81050.931.330.944.6
L&T Emerging Businesses Fund Growth ₹86.3173
↓ -1.49
₹17,306 5,000 3.615.636.723.730.746.1
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Nov 24

Ready to Invest?
Talk to our investment specialist
Disclaimer:
By submitting this form I authorize Fincash.com to call/SMS/email me about its products and I accept the terms of Privacy Policy and Terms & Conditions.

Best Lump Sum Investment in Debt Mutual Funds

Debt Funds invest their fund money in different Fixed Income instruments like treasury bills, corporate Bonds, and much more. These schemes are considered as a good option for short and medium term. Many individuals choose to invest lump sum money in Debt Mutual Funds. Some of the Best Debt Funds that can be chosen for lump sum investment are as follows.

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)2023 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
BOI AXA Credit Risk Fund Growth ₹11.7303
↑ 0.00
₹115 5,000 1.42.36.239.55.66.98%4M 24D5M 23D
Aditya Birla Sun Life Medium Term Plan Growth ₹36.8448
↑ 0.02
₹1,921 1,000 3.76.710.713.66.97.73%3Y 10M 6D5Y 1M 10D
Franklin India Credit Risk Fund Growth ₹25.3348
↑ 0.04
₹104 5,000 2.957.511 0%
DSP BlackRock Credit Risk Fund Growth ₹41.5663
↑ 0.02
₹191 1,000 1.94.17.810.615.68.11%2Y 6M 18D3Y 6M 4D
Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹34.9131
↑ 0.04
₹297 10,000 1.35.913.78.8 0%1Y 15D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Nov 24

Best Hybrid Funds for Lump Sum Investment

Hybrid funds also known as Balanced Fund invest their money in both equity and fixed income instruments. These schemes are suitable for individuals looking for Capital generation along with regular income. Also known as balanced schemes, individuals can choose to invest lump sum amount in hybrid schemes. Some of the best hybrid funds for lump sum investment are listed below.

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2023 (%)
JM Equity Hybrid Fund Growth ₹124.612
↓ -0.53
₹643 5,000 0.210.339.820.425.333.8
HDFC Balanced Advantage Fund Growth ₹501.191
↓ -2.51
₹96,536 5,000 -0.27.63020.420.331.3
ICICI Prudential Multi-Asset Fund Growth ₹706.324
↓ -3.14
₹50,496 5,000 2.38.527.8192124.1
ICICI Prudential Equity and Debt Fund Growth ₹370.04
↓ -1.64
₹41,396 5,000 0.58.430.718.422.128.2
BOI AXA Mid and Small Cap Equity and Debt Fund Growth ₹38.07
↓ -0.53
₹1,000 5,000 0.411.634.217.726.333.7
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Nov 24

Best Index Funds for Lump Sum Investment

The Portfolio of an index fund consists of the shares and other instruments in the same proportion as they are in the index. In other words, these schemes mimic the performance of an index. These are passively managed funds and can be considered as a good option for lump sum investment. Some of the best Index Funds that can be chosen for lump sum investment are as follows.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2023 (%)
Nippon India Index Fund - Sensex Plan Growth ₹40.2239
↓ -0.03
₹7570.98.923.110.115.219.5
LIC MF Index Fund Sensex Growth ₹148.613
↓ -0.11
₹880.78.622.49.714.719
Franklin India Index Fund Nifty Plan Growth ₹193.723
↓ -0.41
₹7440.3924.810.715.520.2
SBI Nifty Index Fund Growth ₹212.118
↓ -0.45
₹8,7290.3924.910.915.620.7
IDBI Nifty Index Fund Growth ₹36.2111
↓ -0.02
₹2089.111.916.220.311.7
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Nov 24

Best Mutual Funds based on Last 1 Month

1. Nippon India US Equity Opportunites Fund

The primary investment objective of Reliance US Equity Opportunities Fund is to provide long term capital appreciation to investors by primarily investing in equity and equity related securities of companies listed on recognized stock exchanges in the US and the secondary objective is to generate consistent returns by investing in debt and money market securities in India. However, there can be no assurance or guarantee that the investment objective of the scheme will be achieved.

Nippon India US Equity Opportunites Fund is a Equity - Global fund was launched on 23 Jul 15. It is a fund with High risk and has given a CAGR/Annualized return of 14% since its launch.  Return for 2023 was 32.4% , 2022 was -19% and 2021 was 22.2% .

Below is the key information for Nippon India US Equity Opportunites Fund

Nippon India US Equity Opportunites Fund
Growth
Launch Date 23 Jul 15
NAV (07 Nov 24) ₹33.8433 ↑ 0.26   (0.77 %)
Net Assets (Cr) ₹681 on 30 Sep 24
Category Equity - Global
AMC Nippon Life Asset Management Ltd.
Rating Not Rated
Risk High
Expense Ratio 2.4
Sharpe Ratio 1.58
Information Ratio -1.53
Alpha Ratio -6.43
Min Investment 5,000
Min SIP Investment 100
Exit Load 0-1 Years (1%),1 Years and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Oct 19₹10,000
31 Oct 20₹11,288
31 Oct 21₹15,643
31 Oct 22₹13,024
31 Oct 23₹14,755
31 Oct 24₹19,500

Nippon India US Equity Opportunites Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹447,579.
Net Profit of ₹147,579
Invest Now

Returns for Nippon India US Equity Opportunites Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Nov 24

DurationReturns
1 Month 6.5%
3 Month 14.6%
6 Month 11.4%
1 Year 32.3%
3 Year 9.3%
5 Year 15.4%
10 Year
15 Year
Since launch 14%
Historical performance (Yearly) on absolute basis
YearReturns
2023 32.4%
2022 -19%
2021 22.2%
2020 22.4%
2019 31.8%
2018 7.7%
2017 16.9%
2016 8.2%
2015
2014
Fund Manager information for Nippon India US Equity Opportunites Fund
NameSinceTenure
Kinjal Desai25 May 186.36 Yr.

Data below for Nippon India US Equity Opportunites Fund as on 30 Sep 24

Equity Sector Allocation
SectorValue
Technology26.38%
Consumer Cyclical22.09%
Health Care17.06%
Communication Services15.98%
Financial Services13.14%
Basic Materials4.14%
Asset Allocation
Asset ClassValue
Cash1.2%
Equity98.8%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Amazon.com Inc (Consumer Cyclical)
Equity, Since 31 Mar 19 | AMZN
8%₹52 Cr33,057
↓ -425
Booking Holdings Inc (Consumer Cyclical)
Equity, Since 31 Jul 15 | BKNG
7%₹46 Cr1,314
↓ -16
Meta Platforms Inc Class A (Communication Services)
Equity, Since 31 Oct 16 | META
7%₹45 Cr9,328
↓ -118
Microsoft Corp (Technology)
Equity, Since 30 Nov 18 | MSFT
6%₹44 Cr12,121
↓ -153
Taiwan Semiconductor Manufacturing Co Ltd ADR (Technology)
Equity, Since 31 Jan 23 | TSM
6%₹43 Cr29,760
Alphabet Inc Class A (Communication Services)
Equity, Since 31 Jul 15 | GOOGL
6%₹43 Cr30,858
↓ -396
IQVIA Holdings Inc (Healthcare)
Equity, Since 28 Feb 17 | IQV
6%₹41 Cr20,581
↓ -272
Mastercard Inc Class A (Financial Services)
Equity, Since 31 Jul 15 | MA
5%₹33 Cr8,039
↓ -102
Charles Schwab Corp (Financial Services)
Equity, Since 31 Jul 22 | SCHW
5%₹31 Cr56,577
↓ -728
Starbucks Corp (Consumer Cyclical)
Equity, Since 31 Mar 24 | SBUX
4%₹29 Cr36,037
↓ -454

2. Franklin India Feeder - Franklin U S Opportunities Fund

The Fund seeks to provide capital appreciation by investing predominantly in units of Franklin U. S. Opportunities Fund, an overseas Franklin Templeton mutual fund, which primarily invests in securities in the United States of America.

Franklin India Feeder - Franklin U S Opportunities Fund is a Equity - Global fund was launched on 6 Feb 12. It is a fund with High risk and has given a CAGR/Annualized return of 16.9% since its launch.  Ranked 6 in Global category.  Return for 2023 was 37.9% , 2022 was -30.3% and 2021 was 17.9% .

Below is the key information for Franklin India Feeder - Franklin U S Opportunities Fund

Franklin India Feeder - Franklin U S Opportunities Fund
Growth
Launch Date 6 Feb 12
NAV (07 Nov 24) ₹73.5576 ↑ 1.13   (1.56 %)
Net Assets (Cr) ₹3,565 on 30 Sep 24
Category Equity - Global
AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd
Rating
Risk High
Expense Ratio 1.52
Sharpe Ratio 1.73
Information Ratio -2.05
Alpha Ratio -5.35
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-3 Years (1%),3 Years and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Oct 19₹10,000
31 Oct 20₹13,847
31 Oct 21₹18,965
31 Oct 22₹13,165
31 Oct 23₹14,888
31 Oct 24₹21,350

Franklin India Feeder - Franklin U S Opportunities Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹470,047.
Net Profit of ₹170,047
Invest Now

Returns for Franklin India Feeder - Franklin U S Opportunities Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Nov 24

DurationReturns
1 Month 5.8%
3 Month 17.8%
6 Month 15.5%
1 Year 43.6%
3 Year 6.1%
5 Year 17.8%
10 Year
15 Year
Since launch 16.9%
Historical performance (Yearly) on absolute basis
YearReturns
2023 37.9%
2022 -30.3%
2021 17.9%
2020 45.2%
2019 34.2%
2018 6.5%
2017 18.1%
2016 -0.8%
2015 8.8%
2014 8.4%
Fund Manager information for Franklin India Feeder - Franklin U S Opportunities Fund
NameSinceTenure
Sandeep Manam18 Oct 212.96 Yr.

Data below for Franklin India Feeder - Franklin U S Opportunities Fund as on 30 Sep 24

Equity Sector Allocation
SectorValue
Technology41.12%
Health Care13.91%
Consumer Cyclical10.57%
Communication Services10.35%
Financial Services7.73%
Industrials7.06%
Basic Materials2.37%
Consumer Defensive2.05%
Real Estate0.54%
Asset Allocation
Asset ClassValue
Cash0.78%
Equity98.27%
Other0.39%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Franklin US Opportunities I(acc)USD
Investment Fund | -
99%₹3,535 Cr4,466,165
↓ -61,712
Call, Cash & Other Assets
CBLO | -
1%₹30 Cr

3. HDFC Long Term Advantage Fund

To generate long term capital appreciation from a portfolio that is predominantly in equity and equity related instruments

HDFC Long Term Advantage Fund is a Equity - ELSS fund was launched on 2 Jan 01. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 21.4% since its launch.  Ranked 23 in ELSS category. .

Below is the key information for HDFC Long Term Advantage Fund

HDFC Long Term Advantage Fund
Growth
Launch Date 2 Jan 01
NAV (14 Jan 22) ₹595.168 ↑ 0.28   (0.05 %)
Net Assets (Cr) ₹1,318 on 30 Nov 21
Category Equity - ELSS
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately High
Expense Ratio 2.25
Sharpe Ratio 2.27
Information Ratio -0.15
Alpha Ratio 1.75
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
31 Oct 19₹10,000
31 Oct 20₹9,439
31 Oct 21₹15,733

HDFC Long Term Advantage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹470,047.
Net Profit of ₹170,047
Invest Now

Purchase not allowed

Returns for HDFC Long Term Advantage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Nov 24

DurationReturns
1 Month 4.4%
3 Month 1.2%
6 Month 15.4%
1 Year 35.5%
3 Year 20.6%
5 Year 17.4%
10 Year
15 Year
Since launch 21.4%
Historical performance (Yearly) on absolute basis
YearReturns
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Fund Manager information for HDFC Long Term Advantage Fund
NameSinceTenure

Data below for HDFC Long Term Advantage Fund as on 30 Nov 21

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

4. Aditya Birla Sun Life International Equity Fund - Plan B

An Open-ended diversified equity scheme with an objective to generate long-term growth of capital, by investing predominantly in a diversified portfolio of equity and equity related securities in the domestic and international markets.

Aditya Birla Sun Life International Equity Fund - Plan B is a Equity - Global fund was launched on 31 Oct 07. It is a fund with High risk and has given a CAGR/Annualized return of 7% since its launch.  Ranked 39 in Global category. .

Below is the key information for Aditya Birla Sun Life International Equity Fund - Plan B

Aditya Birla Sun Life International Equity Fund - Plan B
Growth
Launch Date 31 Oct 07
NAV (28 Jul 23) ₹28.8036 ↑ 0.07   (0.23 %)
Net Assets (Cr) ₹93 on 30 Jun 23
Category Equity - Global
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk High
Expense Ratio 2.6
Sharpe Ratio 0.85
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 1,000
Exit Load 0-365 Days (1%),365 Days and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Oct 19₹10,000
31 Oct 20₹9,813
31 Oct 21₹15,063
31 Oct 22₹14,297

Aditya Birla Sun Life International Equity Fund - Plan B SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹376,357.
Net Profit of ₹76,357
Invest Now

Returns for Aditya Birla Sun Life International Equity Fund - Plan B

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Nov 24

DurationReturns
1 Month 4.2%
3 Month 10.3%
6 Month 10%
1 Year 13.8%
3 Year 18.9%
5 Year 9%
10 Year
15 Year
Since launch 7%
Historical performance (Yearly) on absolute basis
YearReturns
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Fund Manager information for Aditya Birla Sun Life International Equity Fund - Plan B
NameSinceTenure

Data below for Aditya Birla Sun Life International Equity Fund - Plan B as on 30 Jun 23

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

5. PGIM India Global Agribusiness Offshore Fund

The primary investment objective of the scheme is to generate long-term capital growth by investing predominantly in units of overseas mutual funds, focusing on agriculture and/or would be direct and indirect beneficiaries of the anticipated growth in the agriculture and/or affiliated/allied sectors.

PGIM India Global Agribusiness Offshore Fund is a Others - Fund of Fund fund was launched on 14 May 10. It is a fund with High risk and has given a CAGR/Annualized return of 10.7% since its launch.  Ranked 33 in Fund of Fund category.  Return for 2023 was 39.5% , 2022 was -33.8% and 2021 was 7% .

Below is the key information for PGIM India Global Agribusiness Offshore Fund

PGIM India Global Agribusiness Offshore Fund
Growth
Launch Date 14 May 10
NAV (07 Nov 24) ₹43.78 ↑ 0.50   (1.16 %)
Net Assets (Cr) ₹1,352 on 30 Sep 24
Category Others - Fund of Fund
AMC Pramerica Asset Managers Private Limited
Rating
Risk High
Expense Ratio 1.55
Sharpe Ratio 1.66
Information Ratio -0.57
Alpha Ratio 3.61
Min Investment 5,000
Min SIP Investment 1,000
Exit Load 0-12 Months (1%),12 Months and above(NIL)

Growth of 10,000 investment over the years.

DateValue
31 Oct 19₹10,000
31 Oct 20₹16,229
31 Oct 21₹21,261
31 Oct 22₹13,570
31 Oct 23₹16,086
31 Oct 24₹22,357

PGIM India Global Agribusiness Offshore Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹481,656.
Net Profit of ₹181,656
Invest Now

Returns for PGIM India Global Agribusiness Offshore Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Nov 24

DurationReturns
1 Month 3.9%
3 Month 13.9%
6 Month 11.2%
1 Year 35.2%
3 Year 2.3%
5 Year 18.5%
10 Year
15 Year
Since launch 10.7%
Historical performance (Yearly) on absolute basis
YearReturns
2023 39.5%
2022 -33.8%
2021 7%
2020 72.4%
2019 30.9%
2018 0.3%
2017 11.9%
2016 0.8%
2015 -14.7%
2014 0.9%
Fund Manager information for PGIM India Global Agribusiness Offshore Fund
NameSinceTenure
Chetan Gindodia29 Mar 240.51 Yr.

Data below for PGIM India Global Agribusiness Offshore Fund as on 30 Sep 24

Asset Allocation
Asset ClassValue
Cash4.68%
Equity95.32%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
PGIM Jennison Global Eq Opps USD I Acc
Investment Fund | -
99%₹1,335 Cr503,223
↓ -12,790
Clearing Corporation Of India Ltd.
CBLO | -
2%₹21 Cr
Net Receivables / (Payables)
Net Current Assets | -
0%-₹4 Cr

Things to be Considered During Lump Sum Investment

Before investing in Mutual Funds individuals need to take care a lot of parameters. It includes:

Timing the Market

When it comes to lump sum investing, individuals need to always look for Market timings especially with respect to equity-based funds. A good timing to invest lump sum is when the markets are low and there’s a scope that they will start appreciating soon. However, in case if the markets are already at peak then, it is better to stay off from lump sum investment.

Diversification

Diversification is also an important aspect that needs to be considered before investing lump sum. Individuals in case of lump sum investment should diversify their investments by spreading into multiple avenues. This will help to ensure that their overall portfolio performs well even if one of the schemes doesn’t perform.

Do Your Investment as per Your Objective

Any investment that individuals do is to attain a particular objective. Therefore, individuals should check whether the scheme’s approach is in-line with the investor’s objective. Here, individuals should look for various parameters such as CAGR returns, Absolute returns, the impact of taxation and much more before investing in the scheme.

Redemption should be done at the Correct Time

Individuals should do their Redemption at the correct time in lump sum investment. Though it can be as per the investment objective yet; individuals should do a timely review of the scheme in which they are planning to invest. However, they also need to hold their investments for a longer duration so that they can enjoy maximum benefits.

Mutual Fund Lump Sum Return Calculator

Mutual Fund lump sum return calculator helps individuals to show how the lump sum investment of an individual grows over a given timeframe. Some of the data that needs to input in the lump sum calculator includes the tenure of the investment, initial investment amount, long-term expected growth rate and much more. An illustration of the Mutual Fund lump sum return calculator is as follows.

ILLUSTRATION

Lump Sum Investment: INR 25,000

Investment Tenure: 15 Years

Long-term Growth Rate (Approx.): 15%

Expected Returns as per Lump Sum Calculator: INR 2,03,427

Net Profit on the Investment: INR 1,78,427

Lump-Sum-Calculator

Thus, the above calculation shows that the net profit on the investment on your investment is INR 1,78,427 while the total value of your investment is INR 2,03,427.

Advantages and Disadvantages of One-Time Investment in Mutual Fund

Similar to SIP, Lump Sum Investment also has its own set of advantages and disadvantages. So, let us look at these advantages and disadvantages.

Advantages

The advantages of Lump Sum investment are as follows.

  • Invest Big Amount: Individuals can invest big amounts in Mutual Funds and earn higher returns instead of keeping the funds idle.
  • Ideal for Long Term: Lump Sum mode of investment is good for long-term investments specially in case of equity funds. However, in case of debt funds, the tenure can be short or medium-term
  • Convenience: Lump sum mode of investment is convenient as the payment is done only once and is not deducted at regular intervals.

Disadvantages

The disadvantages of Lump Sum investment are:

  • Irregular Investment: Lump Sum investment does not ensure regular savings of an investor as it does not instil regular savings habit.
  • Higher Risk: In Lump Sum investing, it is important to look at the timings. This is because in lump sum mode the investment is done only once and not at regular intervals. Therefore, if individuals do not consider the timing, then they might end up in losses.

Conclusion

Thus, from the above pointers, it can be said that lump sum mode is also a good way to invest in Mutual Funds. However, individuals need to be confident while investing a lump sum amount in the scheme. If not, they can choose SIP mode of investment. In addition, people should understand the scheme’s modalities before investing. If required, they can even consult a financial advisor. This will help them to ensure that their money is safe and their objectives are accomplished on time.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
How helpful was this page ?
Rated 5, based on 1 reviews.
POST A COMMENT