I've been using Xcode for a while now. One thing that always bugs me is the way it handles files. I like to have my files all in nested folders rather than one big physical folder, but when you create a group in Xcode by default it does not create a folder just a virtual folder within the project.

I can see that virtual folders are great for linking code in arbitrary places into your project but once you get beyond a few classes I find the one big folder approach really painful. And then if you try to fix it later it takes ages and is easy to break your build.

Is it possible to change this behaviour so that by default it creates a physical folder? Or am I doing it wrong and trying to cling to some other way of working? How do other people work with files in Xcode?