New Delhi, May 1 -- There is a tendency to think of mutual funds in binary terms: either actively managed or passive index funds. In reality, it's a spectrum. Some active funds diverge sharply from their benchmark, making concentrated bets the index barely touches. Others look largely index-like, with only marginal differences.

Both, however, charge active management fees. And disclosures rarely make that distinction obvious. So how do you tell what you are actually paying for?

This is where active share comes in. It puts a number on how differently a fund's portfolio is constructed relative to its benchmark, helping you spot whether a fund is genuinely active or simply hugging the index.

Active share is the percentage of a fund's port...