{"id":12334,"date":"2026-08-25T12:19:35","date_gmt":"2026-08-25T06:49:35","guid":{"rendered":"https:\/\/www.fatakpay.com\/blog\/?p=12334"},"modified":"2026-08-25T12:19:38","modified_gmt":"2026-08-25T06:49:38","slug":"what-are-mid-cap-funds","status":"publish","type":"post","link":"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/","title":{"rendered":"What Are Mid Cap Funds? Meaning, Features, Benefits and Risks\u00a0"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_86 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Key_Takeaways\" >Key Takeaways&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#What_Is_a_Mid_Cap\" >What Is a Mid Cap?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#What_Are_Mid-Cap_Mutual_Funds\" >What&nbsp;Are&nbsp;Mid-Cap Mutual Funds?&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#What_Is_Mid_Cap_Mutual_Fund_Investment_Like\" >What Is Mid Cap Mutual Fund Investment Like?&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Features_of_a_Mid-Cap_Fund\" >Features of a Mid-Cap Fund&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Benefits_of_Investing_in_Mid-Cap_Mutual_Funds\" >Benefits of Investing in Mid-Cap Mutual Funds&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Risks_of_Mid_Cap_Funds\" >Risks of Mid Cap Funds&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Who_Should_Consider_Investing_in_Mid_Cap_Funds\" >Who Should Consider Investing in Mid Cap Funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Frequently_Asked_Questions\" >Frequently Asked Questions&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#What_are_mid_cap_funds_in_simple_words\" >What are&nbsp;mid cap&nbsp;funds in simple words?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#What_is_the_SEBI_definition_of_a_mid-cap_company\" >What is the SEBI definition of a mid-cap company?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Are_mid-cap_funds_riskier_than_large-cap_funds\" >Are mid-cap funds riskier than large-cap funds?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#How_long_should_I_stay_invested_in_a_mid_cap_fund\" >How long should I stay invested in a&nbsp;mid cap&nbsp;fund?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#How_are_mid_cap_funds_taxed\" >How are&nbsp;mid cap&nbsp;funds taxed?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/#Should_a_beginner_invest_in_mid_cap_funds\" >Should a beginner invest in&nbsp;mid cap&nbsp;funds?&nbsp;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span><strong>Key Takeaways<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Mid cap funds primarily invest in companies ranked 101st to 250th by full market\u00a0capitalisation.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>SEBI requires\u00a0mid cap\u00a0funds to invest at least 65% of their assets in mid-cap companies.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Mid cap funds can offer growth potential but\u00a0generally carry\u00a0higher volatility than large cap funds.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They may suit investors with a long-term horizon and a higher tolerance for market fluctuations.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Beginners should assess their financial goals, risk\u00a0appetite\u00a0and asset allocation before investing in\u00a0mid cap\u00a0funds.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Mid cap\u00a0funds invest primarily in companies that fall between large-cap and small-cap stocks by market\u00a0capitalisation. They can offer investors a balance between the stability of established businesses and the growth potential of smaller companies. However, their returns can fluctuate significantly with market conditions. This guide explains\u00a0&#8220;what are mid-cap funds,&#8221;\u00a0how they work, their features,\u00a0benefits\u00a0and risks, and who may consider investing in them.\u00a0\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_a_Mid_Cap\"><\/span><strong>What Is a Mid Cap?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A mid cap refers to a company that ranks from 101st to 250th in terms of full market&nbsp;capitalisation, according to SEBI&#8217;s classification. Companies in this segment are&nbsp;generally more&nbsp;established than small-cap businesses but may still have considerable room for expansion.&nbsp;&nbsp;For investors wondering what a mid-cap is, it is&nbsp;essentially a&nbsp;market-capitalisation&nbsp;category positioned between large-cap and small-cap companies.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_Mid-Cap_Mutual_Funds\"><\/span><strong>What&nbsp;Are&nbsp;Mid-Cap Mutual Funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Mid cap mutual funds are equity mutual funds that invest&nbsp;predominantly in&nbsp;mid-cap companies. Under SEBI&#8217;s&nbsp;categorisation, a mid-cap fund must invest at least 65% of its total assets in equity and equity-related instruments of mid-cap companies.&nbsp;The remaining portion may be invested in other permitted securities, depending on the scheme&#8217;s investment strategy.&nbsp;The fund manager typically selects companies based on factors such as earnings potential, business quality, valuations, and growth prospects.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_Mid_Cap_Mutual_Fund_Investment_Like\"><\/span><strong>What Is Mid Cap Mutual Fund Investment Like?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investing in a mid-cap mutual fund gives investors exposure to a diversified portfolio of mid-cap companies through a professionally managed fund. Instead of selecting individual stocks, investors own units of the mutual fund and&nbsp;participate&nbsp;in the performance of its underlying portfolio.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_a_Mid-Cap_Fund\"><\/span><strong>Features of a Mid-Cap Fund<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Some key\u00a0features of a mid-cap fund\u00a0include:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Focus on mid-cap companies:<\/strong>\u00a0The portfolio primarily\u00a0comprises\u00a0companies ranked 101st to 250th by full market\u00a0capitalisation.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Minimum 65% allocation:<\/strong>\u00a0SEBI requires Mid Cap Funds to invest at least 65% in mid-cap equity and equity-related instruments.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Growth-oriented exposure:<\/strong>\u00a0Mid-cap companies may have greater scope for business expansion compared with mature large-cap businesses.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Higher volatility:<\/strong>\u00a0These funds can experience sharper price movements than large-cap-oriented funds.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Professional management:<\/strong>\u00a0Fund managers research and select securities based on the scheme&#8217;s investment strategy.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_Investing_in_Mid-Cap_Mutual_Funds\"><\/span><strong>Benefits of Investing in Mid-Cap Mutual Funds<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The&nbsp;<strong>benefits of investing in mid-cap mutual funds<\/strong>&nbsp;can make them suitable for investors seeking long-term growth potential and willing to accept higher volatility.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Growth potential:<\/strong>\u00a0Mid-cap businesses may have opportunities to expand their market share, revenues, and profitability as they mature.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Diversification:<\/strong>\u00a0A single fund can provide exposure to multiple mid-cap companies across different industries.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Professional management:<\/strong>\u00a0Investors benefit from the research and\u00a0portfolio-management\u00a0expertise\u00a0of the fund manager.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Long-term wealth creation potential:<\/strong>\u00a0Businesses that successfully scale over time can potentially generate attractive returns, although returns are not guaranteed.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding&nbsp;what the Nifty 50 is&nbsp;can help investors understand the large-cap end of the market.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Risks_of_Mid_Cap_Funds\"><\/span><strong>Risks of Mid Cap Funds<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While mid-cap funds may&nbsp;provide&nbsp;growth opportunities, they also carry risks.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Market volatility:<\/strong>\u00a0Mid-cap stocks can experience significant price fluctuations during market corrections or periods of uncertainty.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Business risk:<\/strong>\u00a0Some mid-cap companies may have less financial strength, operating history, or market dominance than\u00a0established\u00a0large-cap companies.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Valuation risk:<\/strong>\u00a0If investors pay high valuations for growth expectations, subsequent returns may be affected if the companies fail to meet those expectations.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Concentration risk:<\/strong>\u00a0Although mutual funds diversify across stocks, a scheme may still have meaningful exposure to\u00a0particular sectors\u00a0or companies.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Investors should also understand&nbsp;<a href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/blue-chip-fund\/\" target=\"_blank\" rel=\"noopener\"><strong>blue-chip fund<\/strong><\/a>&nbsp;to compare mid-cap exposure with the&nbsp;relatively established&nbsp;large-cap segment.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_Should_Consider_Investing_in_Mid_Cap_Funds\"><\/span><strong>Who Should Consider Investing in Mid Cap Funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Mid-cap funds may be considered by investors who:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Have a\u00a0<strong>long-term investment horizon<\/strong>\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Can tolerate\u00a0relatively high\u00a0market volatility\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Seek growth-oriented equity exposure\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Understand that returns are market-linked and not guaranteed\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Have already considered their overall asset allocation and risk profile\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Investors should avoid choosing a fund solely because of recent returns. Before investing, compare the scheme&#8217;s investment strategy, portfolio, expense ratio, risk&nbsp;level&nbsp;and historical performance.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also important to understand applicable taxation, including LTCG tax on mutual funds, before investing. New investors can also review&nbsp;mistakes to avoid as a new investor&nbsp;to develop&nbsp;better investing habits.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">So,\u00a0what are mid-cap funds? They are equity\u00a0<a href=\"https:\/\/www.fatakpay.com\/invest-in-mutual-funds\" target=\"_blank\" rel=\"noopener\"><strong>mutual funds<\/strong><\/a>\u00a0that\u00a0predominantly invest\u00a0in companies ranked 101st to 250th by full market\u00a0capitalisation. Their position between large-cap and small-cap stocks can provide a combination of growth potential and diversification, but this comes with higher volatility. Investors should consider their financial goals, investment\u00a0horizon\u00a0and risk tolerance before adding mid-cap funds to their portfolio.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Take the next step towards smarter financial planning with&nbsp;FatakPay. Explore financial solutions designed to help you manage your money, build&nbsp;credit&nbsp;and work towards your goals with greater confidence.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span><strong>Frequently Asked Questions<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_mid_cap_funds_in_simple_words\"><\/span><strong>What are&nbsp;mid cap&nbsp;funds in simple words?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Mid cap funds are equity mutual funds that&nbsp;mainly invest&nbsp;in companies ranked 101st to 250th by full market&nbsp;capitalisation. They offer investors exposure to businesses that are&nbsp;generally more&nbsp;established than small-cap companies but may have greater growth potential than large-cap companies.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_SEBI_definition_of_a_mid-cap_company\"><\/span><strong>What is the SEBI definition of a mid-cap company?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under SEBI&#8217;s classification, a mid-cap company is one ranked from 101st to 250th in terms of full market&nbsp;capitalisation. This classification helps mutual fund investors understand where a company falls within India&#8217;s large-cap, mid-cap and small-cap categories.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_mid-cap_funds_riskier_than_large-cap_funds\"><\/span><strong>Are mid-cap funds riskier than large-cap funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, mid-cap funds are&nbsp;generally riskier&nbsp;than large-cap funds because mid-cap companies can experience greater price fluctuations. They may offer higher growth potential, but their performance can be more sensitive to economic conditions, business developments, and market sentiment compared with&nbsp;relatively established&nbsp;large-cap companies.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_long_should_I_stay_invested_in_a_mid_cap_fund\"><\/span><strong>How long should I stay invested in a&nbsp;mid cap&nbsp;fund?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A long-term investment horizon is&nbsp;generally more&nbsp;suitable for mid-cap funds because equity markets can experience short-term volatility. Staying invested for several years can give the&nbsp;portfolio more time to navigate market cycles and allow investors to align their investment with long-term financial goals.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_are_mid_cap_funds_taxed\"><\/span><strong>How are&nbsp;mid cap&nbsp;funds taxed?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Mid cap funds are equity-oriented mutual funds, so their tax treatment depends on the holding period and applicable tax rules. Short-term and long-term capital gains are taxed differently. Investors should understand the applicable&nbsp;<a href=\"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/long-term-capital-gain-tax-on-mutual-funds\/\" target=\"_blank\" rel=\"noopener\"><strong>LTCG tax on mutual funds<\/strong><\/a>&nbsp;and current tax provisions before investing.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Should_a_beginner_invest_in_mid_cap_funds\"><\/span><strong>Should a beginner invest in&nbsp;mid cap&nbsp;funds?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A beginner can consider mid-cap funds if they have a long investment horizon and are comfortable with&nbsp;relatively high&nbsp;volatility. However, new investors should first understand their&nbsp;risk&nbsp;tolerance, financial goals, and asset allocation before investing, rather than selecting a mid-cap fund solely based on past returns.&nbsp;<\/p>\n\n\n\n<script type=\"application\/ld+json\"> \n{ \n  \"@context\": \"https:\/\/schema.org\/\", \n  \"@type\": \"BreadcrumbList\", \n  \"itemListElement\": [{ \n    \"@type\": \"ListItem\", \n    \"position\": 1, \n    \"name\": \"Home\", \n    \"item\": \"https:\/\/www.fatakpay.com\" \n  },{ \n    \"@type\": \"ListItem\", \n    \"position\": 2, \n    \"name\": \"Blog\", \n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/\" \n  },{ \n    \"@type\": \"ListItem\", \n    \"position\": 3, \n    \"name\": \"Mutual Funds\", \n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/\" \n  },{ \n    \"@type\": \"ListItem\", \n    \"position\": 4, \n    \"name\": \"What Are Mid Cap Funds? Meaning, Features, Benefits and Risks\", \n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/\" \n  }] \n} \n<\/script>\n\n\n\n<script type=\"application\/ld+json\"> \n{ \n  \"@context\": \"https:\/\/schema.org\", \n  \"@type\": \"BlogPosting\", \n  \"mainEntityOfPage\": { \n    \"@type\": \"WebPage\", \n    \"@id\": \"https:\/\/www.fatakpay.com\/blog\/mutual-funds\/what-are-mid-cap-funds\/\" \n  }, \n  \"headline\": \"What Are Mid Cap Funds? Benefits, Features & Risks\", \n  \"description\": \"Learn what are mid-cap funds, their meaning, benefits and risks. Understand how mid-cap mutual funds work and whether suit your investment goals with FatakPay.\", \n  \"image\": \"https:\/\/www.fatakpay.com\/navbar-assest\/Logo-2.png\", \n  \"author\": { \n    \"@type\": \"Organization\", \n    \"name\": \"FatakPay\", \n    \"url\": \"https:\/\/www.fatakpay.com\" \n  }, \n  \"publisher\": { \n    \"@type\": \"Organization\", \n    \"name\": \"FatakPay\", \n    \"logo\": { \n      \"@type\": \"ImageObject\", \n      \"url\": \"https:\/\/www.fatakpay.com\/navbar-assest\/Logo-2.png\" \n    } \n  }, \n  \"datePublished\": \"2026-08-25\", \n  \"dateModified\": \"2026-08-25\" \n} \n<\/script>\n\n\n\n<script type=\"application\/ld+json\"> \n{ \n  \"@context\": \"https:\/\/schema.org\", \n  \"@type\": \"FAQPage\", \n  \"mainEntity\": [{ \n    \"@type\": \"Question\", \n    \"name\": \"What are mid cap funds in simple words?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Mid cap funds are equity mutual funds that mainly invest in companies ranked 101st to 250th by full market capitalisation. They offer investors exposure to businesses that are generally more established than small-cap companies but may have greater growth potential than large-cap companies.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"What is the SEBI definition of a mid-cap company?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Under SEBI's classification, a mid-cap company is one ranked from 101st to 250th in terms of full market capitalisation. This classification helps mutual fund investors understand where a company falls within India's large-cap, mid-cap and small-cap categories.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"Are mid-cap funds riskier than large-cap funds?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Yes, mid-cap funds are generally riskier than large-cap funds because mid-cap companies can experience greater price fluctuations. They may offer higher growth potential, but their performance can be more sensitive to economic conditions, business developments, and market sentiment compared with relatively established large-cap companies.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"How long should I stay invested in a mid cap fund?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"A long-term investment horizon is generally more suitable for mid-cap funds because equity markets can experience short-term volatility. Staying invested for several years can give the portfolio more time to navigate market cycles and allow investors to align their investment with long-term financial goals.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"How are mid cap funds taxed?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"Mid cap funds are equity-oriented mutual funds, so their tax treatment depends on the holding period and applicable tax rules. Short-term and long-term capital gains are taxed differently. Investors should understand the applicable LTCG tax on mutual funds and current tax provisions before investing.\" \n    } \n  },{ \n    \"@type\": \"Question\", \n    \"name\": \"Should a beginner invest in mid cap funds?\", \n    \"acceptedAnswer\": { \n      \"@type\": \"Answer\", \n      \"text\": \"A beginner can consider mid-cap funds if they have a long investment horizon and are comfortable with relatively high volatility. However, new investors should first understand their risk tolerance, financial goals, and asset allocation before investing, rather than selecting a mid-cap fund solely based on past returns.\" \n    } \n  }] \n} \n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways&nbsp; Mid cap\u00a0funds invest primarily in companies that fall between large-cap and small-cap stocks by market\u00a0capitalisation. They can offer investors a balance between the stability of established businesses and the growth potential of smaller companies. However, their returns can fluctuate significantly with market conditions. This guide explains\u00a0&#8220;what are mid-cap funds,&#8221;\u00a0how they work, their features,\u00a0benefits\u00a0and<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[697],"tags":[],"class_list":["post-12334","post","type-post","status-publish","format-standard","category-mutual-funds"],"_links":{"self":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/12334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/comments?post=12334"}],"version-history":[{"count":1,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/12334\/revisions"}],"predecessor-version":[{"id":12335,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/12334\/revisions\/12335"}],"wp:attachment":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/media?parent=12334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/categories?post=12334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/tags?post=12334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}