Small Cap Mutual Funds (also known as blue chip funds) invest in companies beyond the top 250 (based on market capitalization) companies that are listed in the stock market.
Since the companies held by these mutual funds are small, the growth rate of the Small Cap Mutual Funds is typically more than other equity mutual funds such as Mid Cap Mutual Funds and Large Cap Mutual Funds. At the same time, Small Cap Mutual Funds are riskier than these other equity mutual funds.
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