Compare the funds you think suit you based on the following parameters.

• Study the fund performances of your shortlisted funds over the past 5 years. Good performance indicates good stock selection skills of the fund manager.
• Check out the CRISIL liquidity score of the funds to evaluate the liquidity risk.
• Consistency is key for fund managers when it comes to mid-cap funds. The stability of the fund management team is always a good sign.
• Focus on how the funds have performed in downturns rather than upturns. This will give you a clear idea of how risk-safe you can be with your fund of choice.

Market volatility: Volatility need not necessarily be a bad factor. However, it is a risk you must prepare yourself for. Mid-cap companies are highly reactive to market movements. They usually grow in proportion to market upturns and downturns.

Business risk: Mid-cap companies are still in the growth phase and face a lot of risk business-wise. This makes your investments also prone to the risks of companies suddenly underperforming or even going bankrupt in response to severe market conditions or world events. (for example, the pandemic, wars, etc.)

Cost: This refers to all kinds of associated with mid-cap funds such as expense ratio and exit load. Mid-cap funds tend to have a higher expense ratio. If you need to withdraw or redeem before time in any circumstance, a high exit load can hurt your returns.