Answer transcript: Most funds claiming to be mid-cap funds are substantially in mid-caps. But let me cite you an example. One of the largest mid-cap funds is HDFC Mid-cap Opportunity, which by its very design is 30% in large caps to provide you with liquidity. It becomes difficult to sell mid-cap stocks in tough market conditions at any price and funds can get into a negative spiral.
At Value Research, we define mid-caps as companies which account for less than top 70% of the total market capitalization but more than the bottom 10%. There are about 330 companies in our universe. Funds investing 60% or more in such stocks are considered by us as mid-cap funds.