Did I make mistake to invest mostly all my salary in mutual fund?I don’t have any loan and I also don’t have to pay rent. Instead of buying new home I decided to put my savings in to Mutual funds which is 65% of my salary. (Approx. 52000 per month). The allocation is 70% in small cap, 20% in midcap and 10% in Large cap. My investment horizon is 5 years.

I will fall under the same category as you.. No Home loans, Not wasting money on fancy show off stuffs. I started same as you by investing in mutual funds and now have broadly increased my investment allocation. I do not know your age but from your message I can understand that you do not have much responsibilities as of now and can take a little bit of risk. Based on my experience pointing out few areas:

1. You should start investing in equity as well. Not Trading but investing in equity i.e. you buy the share now and hold it for few years. You will be amazed by the results. Invest in good companies like Tata, reliance etc for the start. You can do SIP in Nifty ETF / Nifty bees as well.
2. Invest some of your money for short term horizon (more liquid) which in case if you are in urgent need of funds you can withdraw within 2–3 days. There are many options such as short term FDs, P2P funding etc.
3. Purchase gold / silver on special occasions or you can buy gold sovereign bond once the liquid pool is sufficient from that money.
4. For a rough idea invest 35K in Mutual funds, 10K in shares, 7K for liquid investments.