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The MidCap Fund normally invests at least 80% of its net assets plus any borrowing for investment purposes in a diversified portfolio of common stocks of medium-sized companies that fall within the 12-month average of the capitalization ranges of stocks in the Russell Midcap Index, the Fund’s benchmark. Although market capitalizations are constantly changing, as of December 31, 2010, the Russell Midcap Index included companies with market capitalizations between $251 million and $22.1 billion.
We invest in common stocks that possess most of the following characteristics:
- Leading market positions
- High barriers to entry and other competitive or technological advantages
- High returns on equity and assets
- Good growth prospects
- Strong management
- Relatively low debt burdens
We also generally seek to identify investment opportunities in equity securities of companies that we believe have above-average potential for earnings and dividend growth.
To achieve a better risk-adjusted return on its equity investments, the MidCap Fund invests in a diversified portfolio of companies, including companies from a blend of industries and style classes. The MidCap Fund may sell securities for a variety of reasons, such as to secure gains, limit losses or reposition assets to more promising opportunities.
Mutual fund investing involves risk. Principal loss is possible. Mid cap companies tend to have limited liquidity and greater volatility than large-capitalization companies.