This allows the fund to outperform in down markets and capture upside during bull runs. It slid only 29 percent in 2008, for example, while the S&P 500 fell 37 percent. Last year, ClearBridge Appreciation rose 29.28 percent, lagging the S&P 500's return of 32.39 percent.
Nevertheless, Morningstar data shows that the fund follows its benchmark more closely than most of its large-cap blend peers do.
The fund's active share in 2013, for example, was 56 percent, among the lowest in its category with at least $500 million in assets, according to Morningstar. The median active share among 164 funds in that group was 73 percent.
Principal Financial Group's $700 million Principal Large Cap Blend II Institutional Fund had an active share of just 41 percent last year and lagged its benchmark return by 1.44 percentage points, while charging an annual fee of 0.74 percent, Morningstar said.
Unrecognized Problem
Most investors probably do not realize they may have money in a closet index fund, said Max Osbon, a partner at Osbon Capital Management in Boston.
"People don't look too deeply at these things," said Osbon, whose small money management firm emphasizes index investing. "They pay for a sense of security in a brand name."
Osbon said the growing popularity of index funds might reduce demand for more-expensive actively managed funds that adhere to their benchmarks.
That may already be happening for ClearBridge Appreciation, whose investors have pulled out money in each of the last seven years for a total of $2.4 billion, according to Thomson Reuters Corp's Lipper Inc unit.
To be sure, active share is not necessarily a predictor of performance, said Beth McGoldrick, spokeswoman for mutual fund group John Hancock Financial Servicesin Boston.