India, Sept. 24 -- A Large Cap Fund and a Nifty 50 Index Fund may appear similar because both can have substantial exposure to India's largest listed companies. Yet their portfolios can behave differently because the two approaches follow different rules for selecting and weighting stocks. The important distinction is not simply active versus passive. It is how much of the portfolio is shared with the Nifty 50, where the fund takes positions away from the index and what those positions mean for the investor's overall exposure.

What Is a Large Cap Fund Under SEBI Classification

Under SEBI's mutual fund categorisation framework, large cap companies are the 1st to 100th companies in terms of full market capitalisation. A Large Cap Fund mus...