If most professional money managers do one thing well, it's finding creative ways to lure more investor dollars into their fold. After all, once the money starts rolling in, it's easy to want to offer new products to attract more customers.

That's why investors should always look cautiously at fund shops that expand into new territory and put out offerings that break away from their traditional areas of expertise. Just because a manager has made a name in one corner of the market, that doesn't necessarily mean that will translate into success in a different asset class or market segment. Or does it?

Expanding reach
Illustrious investors Bruce Berkowitz and Bill Gross recently announced that they plan to offer new types of funds outside their traditional areas of expertise. Berkowitz has made his name investing in stocks and Gross by investing in bonds, but Berkowitz is coming out with a bond fund, and Gross will play a role in PIMCO's stock funds. So this will be breaking new ground for both managers -- and investors should be cautious when thinking about venturing into untested waters like these, even with proven managers.

Sometimes, though, a fund shop's move into new territory isn't quite as far a reach as going from stocks to bonds or from bonds to stocks. For example, small-cap investing experts Royce & Associates recently announced that they will launch their first mid-cap fund. Because Royce has focused exclusively on smaller stocks for decades, some might view this move as evidence that it's shifting away from what brought it success in the first place in an effort to increase profits. But a closer look reveals that this cynical view may not be Royce's primary motivation.

Finding middle ground
According to Royce, the Royce Mid-Cap fund will focus on companies with market capitalizations of $2.5 billion to $15 billion. The fund will look for the same types of companies that populate Royce's other portfolios -- financially stable ones with meaningful growth prospects and high internal rates of return. The fund will be managed by a team of four Royce professionals and will have a 1.49% expense ratio.

Although Royce has made its name in the small-cap arena, a slight move upstream into mid-cap territory is a logical move. First, Royce already owns a number of solidly mid-cap names in many of its fund portfolios, including car rental company Hertz Global Holdings (NYSE:HTZ), Leucadia National (NYSE:LUK), and Polo Ralph Lauren (NYSE:RL), all of which have a market cap in excess of $5 billion. That means they're already plenty familiar with the players in this corner of the market.

Secondly, consider that Royce likely holds plenty of mid-sized companies that started out as small caps and have grown and flourished. These may still be great companies and have a lot more growing room, but under a strict small-cap mandate, managers may be forced to sell their holdings before they want to, simply because the company has reached a certain size. Upping the limit on market cap means Royce will have the opportunity to take advantage of winners a bit longer as they grow.

Also, from a strictly operational standpoint, moving into mid-cap territory makes strategic sense for Royce. There's only so much growing the firm can do in the small-cap space without getting so big that it can no longer buy and sell positions without moving the market. Moving up the market cap spectrum a little will give management a bit of breathing room, which can only benefit shareholders of the firm's already spectacular small-cap funds.

Ultimately, this is a pretty synergistic move for Royce, because realistically, it has been operating in the mid-cap space for years now and can easily extend its investment process to those companies on the next rung up the market cap ladder. Moving more firmly into the mid-cap arena shouldn't tax resources or stretch any abilities here.

Caution ahead
While the new Royce fund may be sound, investors might want to tread carefully for another reason -- there's no guarantee mid-cap stocks will continue to outpace the rest of the market as they have in recent history. Over the past 15 years, the S&P 500 Index has posted an 8% annualized return, while the small-cap Russell 2000 has returned 7.4%. The Russell Mid-Cap Index, on the other hand, is up 10% annually.

Some individual mid-cap names are up even more. In just 2009 alone, compressor manufacturer Gardner Denver (NYSE:GDI) is up 84%, while fashion accessory merchandiser Fossil (NASDAQ:FOSL) has nearly doubled in price. However, large-cap stocks are more than overdue for their day in the sun, so if you buy this or any other mid-cap fund, be sure to temper your expectations for the future a bit.

Royce's new mid-cap fund is likely to attract a great deal of attention once it hits the market. Thanks to red-hot performance in the past year from mining and industrial holdings like Reliance Steel & Aluminum (NYSE:RS) and Westlake Chemical (NYSE:WLK), Royce's funds have landed at the top of the charts and remain an investor favorite. Truthfully, I'd need to see the fund's expense ratio come down a little bit before I could be completely thrilled about Royce Mid-Cap. However, I do think that investors who decide to invest here will do quite well over the long run.

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Amanda Kish is the Fool's resident fund advisor for the Rule Your Retirement investment newsletter. At the time of publication, she did not own any of the funds or companies mentioned herein. Leucadia National is a Motley Fool Stock Advisor recommendation. Fossil is a Motley Fool Hidden Gems recommendation. The Fool has a disclosure policy.