Do Indian Active Fund Managers Wealth Creators?

Indian households have plethora of avenues to save and invest. The options range from the safest investment avenues such as Post Office small savings schemes, Provident Funds to risky avenues such as Mutual Funds, Stocks in case of financial investments. In case of non-financial investment avenues they park their money in Real Estate and Gold. When we look in to the savings and investment patterns of Indian households the major chunk of the money is put in the safest investment options mentioned above and the amount of money invested in risky assets such as mutual fund and stocks are very less. One of the many reasons is the risk involved in such investments and the other is the doubt about the ability of the options to provide better returns than the safest options available. Those who are ready to take some risk might first try mutual funds before taking part in the capital market by investing in stocks directly. Once, they feel that the active fund managers are giving better returns and they beat passive funds performance, they could realise the importance of investing in risky assets such as active funds. Thus the study made an attempt to see whether the active fund managers are creating wealth to the subscribers of the scheme, by selecting 6 Equity Linked Savings Scheme (ELSS) and found that on an average they were not able to create wealth. However, the study also found one or two manager(s) among them creates wealth. Thus, it calls for the investors to identify the fund managers who could create wealth and put their money in their schemes to grow their investments to fulfil their objectives.