Morningstar's Adam Zoll looked at active share among actively managed small-blend funds and found that large cap funds tend to be the most close to their benchmarks. Zoll said this is due in part to the smaller number of large cap funds in comparison to thousands of publicly traded small cap funds.

This gives small cap funds more options for building a portfolio and not many fund managers try to meet the index unless they plan to for some particular reason, Zoll writes. He points out that a portfolio that doesn't resemble the Russell 2000 index could have a different active share relative to the S&P SmallCap 600 or Morningstar Small Cap of about 850 stocks, for example.

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Edited by: Casey Quinlan


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