Lump sum investing can be an effective strategy for investors looking to build long-term wealth, especially during market corrections or favourable market conditions. Choosing the right mutual fund, however, requires evaluating several factors such as historical returns, expense ratio, portfolio quality, risk level, and fund management expertise.
In May 2026, several equity mutual funds across small-cap, mid-cap, flexi-cap, and infrastructure categories have delivered strong long-term performance. Funds like Nippon India Small Cap Fund, Quant Small Cap Fund, Motilal Oswal Midcap Fund, and HDFC Flexi Cap Fund stand out based on their 10-year CAGR, diversified portfolios, and experienced fund managers. Here’s a closer look at some of the best mutual funds for lump sum investments this month.
| Name | SubCategory | AUM (₹ Crore) | CAGR 5Y (%) | CAGR 10Y (%) |
| Nippon India Small Cap Fund | Small Cap Fund | 61808.84 | 23.11 | 22.17 |
| Quant Small Cap Fund | Small Cap Fund | 25820.98 | 22.87 | 20.22 |
| ICICI Pru Infrastructure Fund | Sectoral Fund - Infrastructure | 7553.53 | 26.98 | 19.50 |
| Motilal Oswal Midcap Fund | Mid Cap Fund | 31046.65 | 24.09 | 18.04 |
| HDFC Flexi Cap Fund | Flexi Cap Fund | 91334.90 | 20.04 | 17.38 |
It is a Very High Risk small-cap mutual fund designed for investors with a long-term investment horizon and high risk appetite. The fund is managed by Samir Rachh, who brings 16 years of experience to the role. As of May 5, 2026, the fund’s NAV stood at ₹193.76. The portfolio remains heavily equity-oriented with 96.03% allocation to equities and 3.73% in cash equivalents.
Key holdings include MCX, HDFC Bank, Karur Vysya Bank, and Apar Industries. LTCG is taxed at 12.5%, while STCG is taxed at 20%.
It is a Very High Risk small-cap mutual fund suitable for investors with a long-term investment horizon and high risk appetite. The fund is managed by Sandeep Tandon, Ankit Pande, Varun Pattani, and Ayusha Kumbhat.
The portfolio has a 94.89% equity allocation along with 4.32% exposure to futures and options. Major holdings include Reliance Industries, RBL Bank, and Adani Power, while pharmaceuticals, private banks, and oil & gas are key sectors. Short-term gains are taxed at 20%, while long-term gains are taxed at 12.5%.
It is a Very High Risk sectoral mutual fund focused on infrastructure-related companies. The fund is managed by Ihab Dalwai and had a NAV of ₹219.13 and AUM of ₹7,553.54 crore as of May 5, 2026. The portfolio has a strong 94.43% equity allocation. Key holdings include IndiGo, Larsen & Toubro, Oberoi Realty, NTPC, and Shree Cement.
It is a Very High Risk mid-cap mutual fund suitable for investors with a long-term investment horizon and higher risk tolerance. The fund is co-managed by Ajay Khandelwal, Ankit Agarwal, Varun Sharma, and Rakesh Shetty.
The portfolio has a strong 96% equity allocation. Key holdings include Kalyan Jewellers, Paytm, and Persistent Systems. Short-term gains are taxed at 20%, while long-term gains above one year attract 12.5% LTCG tax.
It is a Very High Risk equity mutual fund suitable for long-term investors with a high risk appetite. The fund’s current NAV stands at ₹2,136.67 and it is managed by Amit Ganatra, who has over 10 years of experience in equity research. The portfolio has a strong equity allocation of 93.07%, along with exposure to cash equivalents, REITs, InvITs, and government securities.
Its top holdings include ICICI Bank, HDFC Bank, and Axis Bank. Short-term capital gains are taxed at 20%, while long-term capital gains are taxed at 12.5%.
| Name | Expense Ratio | Exit Load |
| Nippon India Small Cap Fund | 0.67 | 1.00 |
| HDFC Flexi Cap Fund | 0.68 | 1.00 |
| Quant Small Cap Fund | 0.83 | 1.00 |
| Motilal Oswal Midcap Fund | 0.85 | 1.00 |
| ICICI Pru Infrastructure Fund | 1.18 | 1.00 |
The best mutual fund for lump sum investment depends on an investor’s financial goals, investment horizon, and risk appetite. Small-cap and mid-cap funds may offer higher growth potential but come with increased volatility, while flexi-cap funds provide diversification across market segments.
Before investing, investors should carefully evaluate factors such as historical performance, expense ratio, portfolio allocation, taxation, and fund manager track record.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 7, 2026, 1:20 PM IST
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