The market, minus the markup.
Most actively managed mutual funds move almost exactly like a low-cost index fund — but charge you much more. See what you’re really paying for.
India’s largest large-cap fund
ICICI Prudential Large Cap Fund
Fee you pay
1.50%
vs 0.80% for an index fund
Real cost of the manager’s 17%
4.84%
a year
Regular plans · fees Oct 2026 · 60 months to Sep 2026 · typical across 24 popular funds: 3.4% · method
First, the benchmark
A benchmark is a fixed list of companies.
The Nifty 50 is India’s 50 largest companies. The Nifty 100 is the largest 100. Every mutual fund is measured against one.
Nifty 50 — 50 companies
Two ways to invest in those 50 companies.
Copies the benchmark.
Buys all 50 companies in the same amounts — so it moves just like the Nifty 50. No one picks, so the fee is low.
50 of 50 same as the benchmark · low fee
A manager changes some of it.
Starts from the same companies, then buys more of some, less or none of others — hoping to beat the benchmark. You pay a higher fee for those choices.
39 of 50 same as the benchmark11 changed by the manager · higher fee
Every actively managed fund names its benchmark. An index fund lets you own that benchmark itself.
Actively managed fund
A large-cap fund
Picks from India’s largest companies
1.50% fee a year
Its benchmark
Nifty 100
India’s 100 largest companies
Index funds
3 index funds
Each buys all 100 companies
0.80% typical fee a year
The difference — 0.70% a year — is what you pay for the manager’s choices.
Example: India’s largest large-cap fund (regular plan) vs the typical index fund on the Nifty 100, fees as of October 2026. Every fund below has its own numbers.
What is your fund manager really adding?
We checked India’s 24 biggest actively managed funds against their own benchmark.
A typical actively managed fund
78% is the same as its benchmark. 22% is the manager’s own choices.
You pay about 1.6% a year on all of it. That makes the manager’s 22% cost you 3.4% a year.
Parag Parikh Flexi Cap Fund
Flexi Cap · ₹1,47,064 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
66%34%Fee · fund vs index fund
1.30% vs 1.03%
Real cost of manager’s part
1.81%
HDFC Flexi Cap Fund
Flexi Cap · ₹1,10,925 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
75%25%Fee · fund vs index fund
1.37% vs 1.03%
Real cost of manager’s part
2.40%
HDFC Mid Cap Fund
Mid Cap · ₹1,05,346 cr
Benchmark
Nifty Midcap 150
Index fund?
Yes · 15
82%18%Fee · fund vs index fund
1.31% vs 1.13%
Real cost of manager’s part
2.10%
Nippon India Small Cap Fund
Small Cap · ₹80,841 cr
Benchmark
Nifty Smallcap 250
Index fund?
Yes · 11
82%18%Fee · fund vs index fund
1.40% vs 1.03%
Real cost of manager’s part
3.05%
ICICI Prudential Large Cap Fund
Large Cap · ₹79,821 cr
Benchmark
Nifty 100
Index fund?
Yes · 3
83%17%Fee · fund vs index fund
1.50% vs 0.80%
Real cost of manager’s part
4.84%
Kotak Mid Cap Fund
Mid Cap · ₹69,655 cr
Benchmark
Nifty Midcap 150
Index fund?
Yes · 15
76%24%Fee · fund vs index fund
1.51% vs 1.13%
Real cost of manager’s part
2.71%
ICICI Prudential Value Fund
Value / Contrarian · ₹60,108 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
71%29%Fee · fund vs index fund
1.55% vs 1.03%
Real cost of manager’s part
2.80%
Kotak Flexi Cap Fund
Flexi Cap · ₹55,674 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
81%19%Fee · fund vs index fund
1.48% vs 1.03%
Real cost of manager’s part
3.40%
Nippon India Multi Cap Fund
Multi Cap · ₹55,566 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
72%28%Fee · fund vs index fund
1.62% vs 1.03%
Real cost of manager’s part
3.10%
SBI Large Cap Fund
Large Cap · ₹54,696 cr
Benchmark
Nifty 100
Index fund?
Yes · 3
83%17%Fee · fund vs index fund
1.51% vs 0.80%
Real cost of manager’s part
4.97%
Nippon India Large Cap Fund
Large Cap · ₹53,646 cr
Benchmark
Nifty 100
Index fund?
Yes · 3
81%19%Fee · fund vs index fund
1.63% vs 0.80%
Real cost of manager’s part
5.23%
Nippon India Growth Mid Cap Fund
Mid Cap · ₹51,142 cr
Benchmark
Nifty Midcap 150
Index fund?
Yes · 15
82%18%Fee · fund vs index fund
1.55% vs 1.13%
Real cost of manager’s part
3.53%
SBI Focused Fund
Focused · ₹50,167 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
63%37%Fee · fund vs index fund
1.58% vs 1.03%
Real cost of manager’s part
2.51%
SBI Contra Fund
Value / Contrarian · ₹47,465 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
78%22%Fee · fund vs index fund
1.62% vs 1.03%
Real cost of manager’s part
3.66%
Mirae Asset Large & Midcap Fund
Large & Mid Cap · ₹44,976 cr
Benchmark
Nifty LargeMidcap 250
Index fund?
Yes · 4
86%14%Fee · fund vs index fund
1.75% vs 0.93%
Real cost of manager’s part
6.71%
SBI Large & Midcap Fund
Large & Mid Cap · ₹41,910 cr
Benchmark
Nifty LargeMidcap 250
Index fund?
Yes · 4
80%20%Fee · fund vs index fund
1.65% vs 0.93%
Real cost of manager’s part
4.59%
HDFC Small Cap Fund
Small Cap · ₹41,670 cr
Benchmark
Nifty Smallcap 250
Index fund?
Yes · 11
77%23%Fee · fund vs index fund
1.56% vs 1.03%
Real cost of manager’s part
3.37%
SBI Small Cap Fund
Small Cap · ₹41,386 cr
Benchmark
Nifty Smallcap 250
Index fund?
Yes · 11
73%27%Fee · fund vs index fund
1.59% vs 1.03%
Real cost of manager’s part
3.12%
Motilal Oswal Midcap Fund
Mid Cap · ₹40,809 cr
Benchmark
Nifty Midcap 150
Index fund?
Yes · 15
61%39%Fee · fund vs index fund
1.62% vs 1.13%
Real cost of manager’s part
2.39%
HDFC Large Cap Fund
Large Cap · ₹39,519 cr
Benchmark
Nifty 100
Index fund?
Yes · 3
82%18%Fee · fund vs index fund
1.58% vs 0.80%
Real cost of manager’s part
5.03%
Axis ELSS- Tax Saver Fund
ELSS · ₹32,144 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
71%29%Fee · fund vs index fund
1.76% vs 1.03%
Real cost of manager’s part
3.52%
SBI ELSS Tax Saver Fund
ELSS · ₹31,724 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
78%22%Fee · fund vs index fund
1.85% vs 1.03%
Real cost of manager’s part
4.78%
Kotak Multi Cap Fund
Multi Cap · ₹29,878 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
77%23%Fee · fund vs index fund
1.80% vs 1.03%
Real cost of manager’s part
4.39%
HDFC Focused Fund
Focused · ₹27,716 cr
Benchmark
Nifty 500
Index fund?
Yes · 6
70%30%Fee · fund vs index fund
1.70% vs 1.03%
Real cost of manager’s part
3.27%
Regular plans. Fees: total expense ratio reported to AMFI, early Oct 2026; index fund fee is the median on the same benchmark. “Invest” shows the index funds that track that benchmark — investing through Clara opens soon. Fund sizes: average AUM Jul–Sep 2026.
How we calculate this +
1. How much moves with the index. For each fund we take 60 months of returns (October 2021 to September 2026, regular plan) and compare them with an index fund that tracks the fund’s benchmark. The share of the fund’s month-to-month moves that the index explains is called R². A fund with an R² of 0.95 moves almost in lock-step with its index.
2. How big the manager’s part is. Following Ross Miller’s method, we treat each fund as a mix of an index fund plus a separate portfolio of the manager’s own choices, and use R² to size that part.
3. What the manager’s part really costs. You pay the fund’s fee on all your money. The index part could be had at an index fund’s fee. The rest of the fee pays for the manager’s part — divided by the size of that part, that’s Miller’s “active expense ratio”.
Source of the method: Ross M. Miller, “Measuring the True Cost of Active Management by Mutual Funds”, Journal of Investment Management, 2007.
Benchmarks used (an index fund on each index):
- Nifty 100: Axis Nifty 100 Index Fund
- Nifty 500: Motilal Oswal Nifty 500 Index Fund
- Nifty LargeMidcap 250: Edelweiss NIFTY Large Midcap 250 Index Fund
- Nifty Midcap 150: Motilal Oswal Nifty Midcap 150 Index Fund
- Nifty Smallcap 250: Nippon India Nifty Smallcap 250 Index Fund
Keep in mind.R² from returns is not the same as comparing actual holdings. Flexi-cap, multi-cap, focused, value and tax-saver funds are all measured against the Nifty 500; a fund with foreign shares or a strong style will look more active. Large & mid-cap funds use 57 months because no older index fund exists on their index. Fees are today’s; past fees were different.
Data: AMFI (fees, fund sizes, fund list) and mfapi.in (NAV history). This is an educational illustration of a published method, not a recommendation to buy, sell or hold any fund.
Is the extra fee worth it? Mostly, no.
Out of every 10 fund managers, this many did worse than their benchmark over 10 years, after fees.
Large-cap
7 in 10
74.0% of funds
Tax-saver (ELSS)
8 in 10
80.5% of funds
Mid & small-cap
8 in 10
81.7% of funds
Source: S&P Dow Jones Indices, SPIVA India Mid-Year 2026, data to 30 June 2026. Funds that closed or merged count as having done worse. Past performance may or may not be sustained in the future.
As markets mature, more and more money moves to index funds.
of fund money is in index funds
up from 19% in 2010
fund managers did worse than their benchmark
over 10 years · US large-cap
Tap India to see where we are.
Index-fund share: Index mutual funds + index ETFs, share of long-term fund assets, end-2025 — ICI 2026 Fact Book, ch. 2. Each market measures this differently. Managers vs benchmark: S&P SPIVA U.S. Mid-Year 2026(83.33%).
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