New Delhi, July 30 -- If you are investing in a large-cap fund, you are effectively investing in a portfolio that closely resembles the Nifty 50 index fund in terms of sector allocation.

A study by DSP Mutual Fund reveals that around 90% of the sectoral allocation of an active large-cap fund closely mirrors the Nifty 50 Index, indicating limited deviation from the benchmark at the sector level.

The study also found that portfolio overlap increases among the largest funds, with the top 10 large-cap mutual funds by assets under management (AUM) showing even higher commonality with the index.

The median active large-cap fund maintains sector allocations that are broadly in line with the Nifty 50 across most sectors. Financials, the larges...