Mutual funds that diversify portfolios are known as large and mid-cap funds between large and mid-cap firms. The ratio between large and mid-cap companies in which the investment is diversified can vary from fund to fund. Because of their participation in both large and mid-cap investments, these funds are put on a higher-risk trading plane relative to a strictly large-cap fund. These funds are investing in a mixture of large and mid-cap stocks. Because of their exposure in both large and mid-cap funds, these funds are placed on a higher-risk trading plane compared to a pure large-cap fund.