Mid cap mutual funds

According to Sebi norms, mid cap mutual funds must invest at least 65% of their corpus in mid-sized or mid cap companies.

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Mid cap mutual funds, as their name suggests, invest mostly in mid-sized companies. According to Sebi norms, mid cap mutual funds must invest at least 65 per cent of their corpus in mid-sized or mid cap companies. Sebi has defined companies with a market capitalisation from 101 to 250 as mid cap companies.

Market capitalisation, commonly called market cap, is the market value of a publicly traded company's outstanding shares. Market capitalization is equal to the share price multiplied by the number of shares outstanding. Mid cap schemes are risky and can be extremely volatile. However, they also have the potential to offer higher returns. This is because some of the mid-sized companies have the potential to become large companies, but their journey to the top need not be smooth.

This is the reason why mid cap schemes are considered ideal for aggressive investors with a high risk appetite and ability to withstand volatility.

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