Best Mutual Funds for Lumpsum Investment in India (2025)

Lumpsum investments in mutual funds provide an excellent opportunity for individuals with a significant amount of capital to invest at once. This strategy is particularly advantageous for those who have received a large sum of money through bonuses, inheritance, or business profits and want to maximize the returns on these funds. However, lumpsum investments can also be risky if not timed properly, making it crucial to carefully select the right funds to invest in. In this article, we will guide you through the top mutual funds for lumpsum investment in India for the year 2025.

When it comes to lumpsum investments, timing the market and understanding the potential risks and rewards are critical. 2025 presents numerous opportunities, particularly for equity-based mutual funds, which have performed excellently in recent years. But the key to successful investing lies in knowing which funds to invest in.

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List of Best Mutual Funds for Lumpsum Investment in India

Investing a large sum of money in mutual funds requires careful research and analysis. With thousands of mutual fund schemes available, selecting the right fund is key to ensuring that you get the best returns. Some of the factors to consider when choosing a mutual fund include historical performance, consistency, the quality of fund management, and the fund’s investment strategy.

In 2025, several mutual funds have emerged as the best choices for lumpsum investments, thanks to their consistent performance, diversified portfolios, and favorable market conditions. Below is a curated list of the top 10 mutual funds in India for lumpsum investments based on their performance over the past 5 years.

Quant Small Cap Fund
Bank of India Small Cap Fund
Quant Infrastructure Fund
Nippon India Small Cap Fund
Canara Rob Small Cap Fund
Tata Small Cap Fund
Quant Mid Cap Fund
Edelweiss Small Cap Fund
Motilal Oswal Midcap Fund
Quant Flexi Cap Fund

These funds cover a diverse range of categories, including small-cap, mid-cap, and flexi-cap, ensuring there’s something for every type of investor, whether you’re looking for higher returns (with higher risk) or a more balanced risk-return profile.

Top 10 Mutual Funds for Lumpsum Investment: An Overview

Now, let’s take a deeper look at each of these funds, exploring their unique features, performance, and what makes them ideal for lumpsum investments in 2025.

Quant Small Cap Fund

Small-cap funds are often considered high-risk but also offer the potential for substantial returns. The Quant Small Cap Fund is one of the top-performing small-cap mutual funds in India, boasting impressive returns of 43.61% over the last 5 years. This fund invests in a diversified portfolio of small-cap stocks across various sectors, targeting companies that are expected to outperform their larger counterparts.

Investment Strategy: The fund focuses on small-cap companies that show strong growth potential. Small-cap stocks are typically more volatile than large-cap stocks, but they offer higher growth prospects over time.
Best Suited For: Investors with a high-risk appetite and a long-term investment horizon who are seeking significant returns.
Exit Load: 1% if redeemed within 1 year, encouraging long-term investment.

Bank of India Small Cap Fund

The Bank of India Small Cap Fund is another strong player in the small-cap space, delivering a return of 35.25% over the last 5 years. This fund is designed for investors looking to capitalize on the growth of small-cap companies, which are often overlooked but can provide superior returns in favorable market conditions.

Investment Strategy: It invests in small-cap stocks that have significant growth potential. The strategy focuses on value investing in high-growth industries.
Best Suited For: Investors willing to take on higher risk for higher returns, with a longer-term investment horizon.
Exit Load: 1% if redeemed within 365 days.

Nippon India Small Cap Fund

Nippon India Mutual Fund’s Small Cap Fund has earned a reputation for consistent performance and has delivered 32.72% returns over the last 5 years. It primarily invests in small-cap stocks with the potential for high growth.

Investment Strategy: Focuses on identifying undervalued small-cap stocks that have the potential to grow rapidly.
Best Suited For: Investors looking for high-growth stocks and who can handle the inherent volatility of small-cap investments.
Exit Load: 1% if redeemed within 30 days.

Quant Infrastructure Fund

Infrastructure development is a critical driver of economic growth in India, and the Quant Infrastructure Fund leverages this by focusing on infrastructure stocks. This fund has delivered a return of 34.93% over the last 5 years.

Investment Strategy: The fund primarily invests in infrastructure-related sectors, such as construction, energy, and logistics. With the Indian government’s emphasis on infrastructure, this sector has seen strong growth potential.
Best Suited For: Investors looking to capitalize on India’s infrastructure boom.
Exit Load: 0.5% if redeemed within 90 days.

Canara Rob Small Cap Fund

The Canara Rob Small Cap Fund is a solid choice for investors seeking high returns from small-cap stocks. This fund has shown an impressive return of 35% over the past 5 years, demonstrating its ability to navigate the volatile small-cap space.

Investment Strategy: Focuses on small-cap stocks that exhibit strong growth potential.
Best Suited For: Aggressive investors with a high risk tolerance.
Exit Load: 1% if redeemed within 1 year.

Tata Small Cap Fund

The Tata Small Cap Fund has made its mark with consistent high returns, registering 30.67% over the last 5 years. This fund’s research-driven approach helps identify promising small-cap stocks in sectors like technology, healthcare, and financial services.

Investment Strategy: Invests in small-cap stocks with strong growth potential.
Best Suited For: Investors willing to take on the risk associated with small-cap stocks.
Exit Load: 1% if redeemed within 1 year.

Quant Mid Cap Fund

The Quant Mid Cap Fund targets mid-sized companies that strike a balance between risk and reward. With a return of 32.22% over the last 5 years, this fund is a solid choice for those who want to reduce the volatility associated with small-cap funds but still desire growth.

Investment Strategy: Invests in mid-cap companies with robust growth potential.
Best Suited For: Investors seeking a mix of growth and stability.
Exit Load: 0.5% if redeemed within 90 days.

Edelweiss Small Cap Fund

Another strong contender in the small-cap space is the Edelweiss Small Cap Fund, which delivered returns of 33.12% over the last 5 years. The fund employs a research-intensive approach to select high-potential small-cap stocks.

Investment Strategy: Invests in small-cap stocks with high growth potential.
Best Suited For: Risk-tolerant investors with a long-term horizon.
Exit Load: 1% if redeemed within 1 year.

Motilal Oswal Midcap Fund

The Motilal Oswal Midcap Fund has consistently outperformed its peers, delivering a return of 31.56% over the past 5 years. This fund focuses on mid-cap companies that are poised for significant growth.

Investment Strategy: The fund primarily invests in mid-cap stocks that have strong growth potential.
Best Suited For: Investors seeking a balanced approach between growth and stability.
Exit Load: 1% if redeemed within 1 year.

Quant Flexi Cap Fund

Flexi-cap funds offer flexibility in terms of the market capitalization of the stocks they invest in. The Quant Flexi Cap Fund is one of the best-performing funds in this category, delivering 28.67% over the last 5 years.

Investment Strategy: Invests across large, mid, and small-cap stocks, allowing the fund to adapt to changing market conditions.
Best Suited For: Investors looking for diversification across market capitalizations.
Exit Load: 1% if redeemed within 15 days.

How to Invest a Lumpsum Amount in Mutual Funds?

Investing a lumpsum amount in mutual funds is a simple process, but it requires careful planning. The key steps to follow are:

Assess Your Financial Goals: Before investing a large sum, evaluate your financial objectives. Do you need the money in the short term, or are you looking for long-term growth? Your time horizon and goals will influence your investment choices.
Choose the Right Mutual Fund: Based on your financial goals, risk tolerance, and time horizon, choose the right mutual fund. Consider whether you want an equity, debt, or hybrid fund.
Open an Investment Account: Open an account with a mutual fund house or an investment platform. The process is simple, and you can do it online.
Invest the Lump Sum: Transfer the lump sum amount into the selected fund. Depending on your preference, you can do this through direct mutual fund companies or third-party platforms like Zerodha, Groww, etc.
Monitor Performance: After investing, keep track of your investment’s performance. Regularly review the portfolio and make adjustments if necessary.

Is Lumpsum Investment Suitable for Inexperienced Investors?

Lumpsum investment can be an attractive option for experienced investors, but it might not always be the best choice for beginners. While it offers the potential for high returns, it can also come with significant risk, especially for those who lack experience in timing the market and understanding the dynamics of various mutual fund schemes.

Challenges for Inexperienced Investors

Market Timing: The biggest challenge with lumpsum investments is market timing. Investing a large sum at once exposes the investor to the risk of entering the market at the wrong time. If the market is overvalued or experiences a correction shortly after the investment, the investor could face losses.
Risk Management: For those who lack investment experience, it can be difficult to assess the appropriate level of risk. Lumpsum investments generally involve higher risk, particularly when investing in equity mutual funds or small-cap stocks.
Lack of Diversification: Without a deep understanding of asset allocation and diversification, inexperienced investors may end up putting all their funds into a single mutual fund or asset class, thus exposing themselves to higher risk.

Is it Still a Good Option for Beginners?

While lumpsum investment may pose some risks for beginners, there are ways to mitigate those risks:

Start Small: Beginners can consider starting with smaller lumpsum amounts and gradually increasing their investments as they become more confident and experienced.
Focus on Low-Risk Funds: Debt funds or balanced/hybrid funds may be more suitable for inexperienced investors as they generally carry lower risk than equity funds.
Consult with a Financial Advisor: Beginners can benefit from seeking guidance from a financial advisor to make informed decisions based on their risk tolerance and financial.

Is Lumpsum Investment Profitable?

Lumpsum investment can indeed be profitable, but like any form of investing, it comes with its own set of risks. The profitability largely depends on the market conditions at the time of investment, the fund chosen, and the investor’s ability to remain patient during periods of market volatility.

Advantages of Lumpsum Investment:

Higher Returns in the Right Market Conditions: If the market is on an upward trajectory, lumpsum investments have the potential to generate higher returns compared to Systematic Investment Plans (SIPs).
Capitalizing on Market Opportunities: By investing a large sum at once, you can capitalize on favorable market conditions and ride the wave of growth.
Long-Term Growth: Mutual funds are designed for long-term wealth creation. With a lumpsum investment, investors are more likely to benefit from the compounding effect over the years.

Risks Associated with Lumpsum Investments:

Market Timing Risk: The success of lumpsum investment depends significantly on when the money is invested. If you invest right before a market downturn, your returns could be negative in the short term.
Lack of Diversification: Lumpsum investments can sometimes lead to concentrated exposure to a single asset class, which can be risky if the market experiences a downturn.

Maximizing Profitability:

To maximize the profitability of a lumpsum investment, it’s essential to choose mutual funds with a solid track record of delivering consistent returns and maintaining strong risk management practices. Additionally, diversifying your lumpsum amount across multiple funds can help mitigate risk and increase the likelihood of higher returns.

How Do I Choose Between Lumpsum and SIP?

The choice between lumpsum and SIP (Systematic Investment Plan) largely depends on individual preferences, financial goals, risk appetite, and market conditions.

Key Differences Between Lumpsum and SIP

Market Timing: Lumpsum investments require careful market timing, while SIPs are less affected by market fluctuations. With SIP, you invest smaller amounts regularly, regardless of the market conditions, which averages out the cost of purchasing units over time.
Risk Profile: Lumpsum investments are riskier as they involve putting a large amount of money into the market at once. In contrast, SIPs spread the risk over a period of time, making it a less volatile option.
Flexibility: SIPs provide more flexibility in terms of adjusting the investment amount, whereas lumpsum investments require a significant amount of money upfront.

Which is Better for You?

Choose SIP if:
- You prefer a more disciplined and systematic approach to investing.
- You have limited funds available and cannot invest a large sum at once.
- You want to mitigate market timing risk.
Choose Lumpsum if:
- You have a significant amount of capital available and want to invest it all at once.
- You are confident in your ability to time the market and are willing to take higher risks for potentially higher returns.
- You want to capitalize on current market conditions or are looking for long-term growth potential.

Can I Switch from SIP to Lumpsum in the Same Mutual Fund?

Yes, it is possible to switch from SIP to lumpsum investment within the same mutual fund. Many mutual fund houses allow investors to modify their investment strategies. For instance, if you have been investing through SIP for a while and now have a large sum of money to invest, you can choose to invest a lumpsum amount while continuing with your SIP.

Steps to Switch from SIP to Lumpsum:

Review Your Current SIP: Before switching, evaluate the performance of your current SIP and the mutual fund’s track record.
Consult with Your Fund House: Contact your mutual fund provider or financial advisor to discuss the option of switching.
Invest the Lumpsum: You can either increase your SIP amount or choose to invest the large sum as a lumpsum in the same mutual fund.

Switching strategies allows you to take advantage of the benefits of both approaches, depending on your current financial situation.

How Does Market Timing Affect Lumpsum Investments?

Market timing plays a crucial role in the profitability of lumpsum investments. When you invest a large sum at once, the market conditions at that particular time will impact your returns significantly.

Positive Impact of Timing the Market Well

Investing During a Market Dip: If you invest during a market correction or dip, the potential for higher returns increases as the market recovers.
High Returns During Bullish Market Phases: Investing during a bullish market phase can lead to significant growth, especially in equity-based mutual funds.

Risks of Poor Market Timing

Investing During a Market Peak: If you invest a lumpsum at the peak of the market, your returns could be negatively affected if the market declines soon after.
Market Volatility: Lumpsum investments expose you to the volatility of the markets, making it essential to monitor the market conditions carefully.

How to Minimize Market Timing Risk

Stagger Lumpsum Investments: One strategy to mitigate market timing risk is to divide the lumpsum amount into smaller parts and invest them over time. This strategy, known as rupee cost averaging, reduces the impact of market volatility.

What Are the Best Mutual Funds for Lumpsum Investment?

When choosing the best mutual funds for lumpsum investment, you should consider the fund’s past performance, expense ratio, risk profile, and overall market conditions. Funds that have a solid long-term track record and strong management tend to offer the best potential for lumpsum investments.

The best mutual funds in India for lumpsum investment in 2025, based on past performance and returns, include:

Quant Small Cap Fund
Bank of India Small Cap Fund
Nippon India Small Cap Fund
Quant Infrastructure Fund
Tata Small Cap Fund

These funds have delivered high returns in the past and are well-suited for lumpsum investments. It’s essential to carefully research each fund’s strategy and ensure it aligns with your financial goals.

Benefits of Investing in the Best Mutual Fund for Lumpsum Investments

Investing in the best mutual funds for lumpsum investment can offer several key benefits:

High Returns Potential: The top-performing mutual funds often offer significant growth potential, especially when invested for the long term.
Diversification: These funds typically invest in a diversified range of assets, reducing the overall risk of your investment.
Professional Management: The best funds are managed by experienced professionals who actively monitor the portfolio to ensure maximum returns.

What Are the Returns on the Best Mutual Fund for Lumpsum Investments & How Are They Calculated?

The returns on lumpsum investments depend on a variety of factors, including the type of mutual fund, the market conditions, and the length of time the money is invested. Mutual funds usually report their returns on a 1-year, 3-year, 5-year, and since inception basis, providing a clear picture of the fund’s historical performance.

Returns are typically calculated using the Compound Annual Growth Rate (CAGR), which accounts for the reinvestment of dividends and the overall growth of the investment.