Beating the benchmark and the category by small margins every year can add up to quite a big outperformance. That's the lesson from Canara Robeco Emerging Equities, which had a difficult time between 2006 and 2008 but has got its act together quite well since 2009. The fund has beaten the category every year in the last seven years and has retained a four-star rating for much of the last five years. The fund defines its universe as those companies which fall in the range of the 151st to 500th stock in the listed space by market cap. The fund follows a blend of the growth and value styles. The focus is on identifying future leaders, with companies that can see value unlocking through mergers, divestments and demergers also finding space in the portfolio. The fund avoids leveraged companies and those with doubtful management. It seeks to unearth the future blue chips.

The fund has stayed ahead of its benchmark by 11 percentage points over three years and 10 percentage points over five years. Though it struggled in the falling markets of 2008, it has outperformed both in the bear market of 2011 and in the bull markets of 2009 and 2014. The fund hasn't outpaced its category by very big margins in the last ten years, but the recent show suggests it is widening its outperformance vis-a-vis the indices and peers.

Overall, it's a pair of safe hands in a volatile category.