Manager Sunil Singhania joined Reliance Asset Management in Dec 2003 and has led this fund since then. His investment style emphasises bottom-up research, which is in keeping with his experience, as before joining Reliance he spent considerable time in the research function of sell-side firms. He invests predominantly in growth stocks he thinks are reasonably priced. Broadly, he scouts for companies he believes can double profits in three to four years and have scalability. But like several peers, he is willing to be flexible and his approach has yielded impressive results over the long haul. From Dec 2003 to Dec 2015 the fund had annualised growth of 23%, outscoring its benchmark index S&P BSE 100 (15%). 

The substantial increase in the fund's size has, however, coincided with a change in the fund's character over the years. At around INR 81 billion in Dec 2010, its size was substantial in absolute terms for a predominantly mid-cap fund. It was also the largest fund in the flexicap Morningstar Category then. Since then, he has progressively allocated a larger portion of the portfolio to large caps, which resulted in the fund's portfolio resembling more of a flexicap fund than a predominantly mid-cap. Although Singhania insists that the fund's size does not constrain his style given his long-term focus, and also maintains that over time he intends to increase allocation to mid-caps to restore the fund's character. As of Nov 2015, the fund was at INR 54 billion. 

We also note that the fund's best performance coincided with an uptick in equity markets from 2004-07. But from Jan 2010 through Dec 2015, the fund has underperformed 57% of its category peers on the return front. That is not to say this is a bad fund. Singhania is an experienced manager backed by a strong investment team and the fund has a noteworthy long-term record. However, our confidence is restrained until there is more evidence that the strategy can be executed with the same proficiency as in the past.