This Reliance Small Cap Fund has beaten its benchmark in all six years since its inception and has held onto a three or four star rating without a pause. It is quite true to label, consistently featuring a 65 to 70 per cent allocation to small-cap stocks, with most of the residual holdings in mid-caps. The large-cap allocations are usually at 5 per cent or less.

That it has managed solid performance, even in bear phases, without leaning on large-caps is creditable. The fund adheres to a simple philosophy of finding good businesses at a good price. While a bottom-up stock picker, it does not lean overtly towards the value or growth styles of investing.

Reliance Small Cap Fund is one of the rare funds in the equity space which have beaten its benchmark as well as category over all time frames: one year, three years, five years or even seven years. Over three and five years, the fund has been ahead of its benchmark by 6 to 13 percentage points. Compared to the category, it has managed 3 to 5 percentage point outperformance. In the last one year, it has even widened its outperformance of the category to 7 percentage points.

The only shortcoming of this fund is that it hasn't seen really challenging bear markets like the one in 2008 as it made its debut much later. But in 2011, it has capped its losses at levels far lower than those of the index and the category. Like its peers, burgeoning size is the only challenge, with assets at over Rs 6,542 crore as on January 2018.

Reliance Small Cap Fund is a reliable performer with a laser focus on small-caps.