How should I divide Rs 20 lakh among these mutual funds?

I am planning to invest Rs 20 lakh in the following mutual funds:
ICICI Prudential US Bluechip Equity Fund
Nippon India US Equity Opportunities Fund
Franklin India Feeder Franklin US Opportunities Fund
Tata Banking and Financial Services Fund
Parag Parikh Long Term Equity Fund

I need to understand how should I divide this amount among these five mutual funds? Also, should I drop or add any scheme?
---Chanda Pandey

Prableen Bajpai, Founder & Managing Partner, Finfix Research & Analytics, responds:

If you are investing in mutual funds for the first time, you need to construct a portfolio based on your risk appetite, financial goals and investment horizon.

Out of the five funds you have mentioned, ICICI Prudential US Bluechip Equity Fund, Nippon India US Equity Opportunities Fund, and Franklin India Feeder Franklin US Opportunities Fund invest a major part of their corpus in the US stocks. Tata Banking and Financial Services Fund is a sectoral fund, while Parag Parikh Long Term Equity Fund is a multi cap fund which provides some geographical diversification as well.


Since you have not mentioned your investment horizon and risk profile, it is difficult to suggest any funds. Assuming that you have a seven to 10-year horizon, you should invest in a multi cap fund, along with a mid cap, and one large cap or index fund. You should avoid thematic or sectoral funds while constructing the core portfolio. Out of your schemes you have mentioned, you can invest in Parag Parikh Long Term Equity Fund, and combine it with a good large cap and mid cap fund.