So first, you invest your money into the fund and subsequently you are allotted the units of the fund. There are several other investors like you who invest money in mid cap funds. Collectively all the money of all the investors that have subscribed to the units of the fund, are eventually invested in stocks of mid cap companies by the fund manager. Before making an investment, a fund manager does a rigorous research into the company's potential by going through their management details, balance sheet statements etc. So don't worry, your money is in qualified and experienced hands.