5 Marvelous Mid-Cap Funds

In theory, midsize-company stocks operate in a sweet spot for investors. No longer struggling to get out of the gates, these financially mature firms, led by experienced executives, should come with more stability than small companies. They should also offer greater potential for growth than mega-size firms, whose shares have market capitalizations (stock price multiplied by shares outstanding) that run into the hundreds of billions.

In practice, the theory holds true over longer periods of time. Over the past 20 years, constituents of the Russell Midcap index, which currently sport market caps between $2 billion and $35 billion, have boosted earnings per share at a faster rate, on average, than their large- and small-cap counterparts. During the same period, mid caps have been about 14% more