Mid-cap equity funds are investment vehicles that focus on investing in companies with medium market capitalizations. Mid-cap companies are generally smaller than large-cap companies but larger than small-cap companies.

Investing in mid-cap equity funds can offer a balance between growth potential and risk. Mid-cap companies have the potential for significant growth, as they are often expanding their operations, launching new products or services, or entering new markets. However, they may also face higher risks compared to large-cap companies, as they might have less-established market positions and potentially face greater competition.

Mid-cap equity funds can provide diversification benefits to investors. By investing in a portfolio of mid-cap stocks, the fund aims to spread risk across multiple companies and industries. This diversification helps reduce the impact of any individual company's performance on the overall fund's returns.

Investors considering mid-cap equity funds should carefully assess their investment objectives, risk tolerance, and time horizon. Mid-cap funds can offer the potential for higher returns compared to large-cap funds, but they also come with increased volatility and risk.