Is it right if I invest in debt and equity funds separately

Sorry for replying to you late.

Your idea of keeping your investments diversified across different category of funds, like debt, equity and balanced may be good. But, the same may not get you the most tax efficient returns.

As you may know, the long term capital gains (after 3 years) in case of debt funds are taxed @20% post indexation but in case of equity and balanced funds the long term capital gains are completely tax free. Our suggestion would be to take exposure in debt instruments via balanced funds. You must be aware that balanced funds invests only upto 65% in equities and rest in debt instruments. Therefore, the portion you want to invest in debt funds and balanced funds separately can be invested only in balanced funds. This way your exposure will be in both the asset classes, equity and debt, and the returns will also be more tax efficient.

Again, investing across large cap and mid cap can be restricted by investing only in diversified equity funds. Diversified equity funds invests in all sectors and market caps of stocks and the most ideal choice for long term investments.

The total number of funds that you are planning to invest is too high! Stick to maximum 3-4 funds in balanced fund category and maybe 4 funds from diversified equity fund category.

For selecting top performing funds across all the categories, this tool will help https://www.advisorkhoj.com/mutual-funds...

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