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By Christine Benz and Russel Kinnel | 07-23-2015 03:00 PM

3 of the Best Mid-Cap Funds

These are are all solid, well-managed funds, but investors should check their existing mid-cap exposure before investing in a fund dedicated to this market cap, says Morningstar's Russ Kinnel.

Christine Benz: Hi, I'm Christine Benz for Some investors consider mid-cap stocks to be in the market sweet spot. Joining me to discuss Morningstar's favorite mid-cap blend funds is Russ Kinnel--he's director of fund research for Morningstar.

Russ, thank you so much for being here.

Russ Kinnel: Good to be here.

Benz: Russ, we want to get into some of your specific picks for mid-cap blend funds. But before we do that, let's discuss the case for mid-cap blend stocks and the category in general.

Kinnel: Well, you really get a mix of funds that are there because they have a blend of small, mid, and large. And the funds that have mid-cap in their name are really focusing on that area. Mid-cap companies have some natural appeal because they tend to have a little more seasoned management. They have a little greater product diversity than, say, small cap. On the other hand, they've still got a lot more room to grow. If you buy General Motors (GE) or Microsoft (MSFT), you might wonder how much they can grow from here. You don't have that issue in mid-caps.

Benz: A number of Morningstar's favorite mid-cap blend funds are actually closed to new investors. Should I read anything into that, as a prospective mid-cap investor? Could it mean that the category is a little bit overheated or should I not get too worried about that?

Kinnel: I think it's just a sign that, overall, the U.S. equity market rally is a little long in the tooth, and so we do see closed funds across the board. I don't know that mid-caps are particularly illustrative of that or any worse off than, say, small or large. I just think U.S. equities, in general, have had a very long run.

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