Fama French Three Factor Analysis of Balanced Mutual Fund in India

Abstract

Balanced Mutual Funds were established with an objective of generating regular income and long term capital appreciation by investing in shares, bonds and sometimes money market instruments in a single portfolio. Balanced Mutual Fund is an avenue which offers an investor the opportunity to invest in equity as well as fixed income securities. All Balanced Mutual Fund schemes have the similar objective but each differs in terms of return generation and risk involved. As such, an analysis have been made in this paper for Balanced Mutual Funds in Indian mutual fund industry using Fama French three factor model. In particular 24 regular- growth oriented Balanced Mutual Funds have been taken for this study. The wide array of funds often makes it a little difficult for investors to choose the best scheme for them. The present study will act as a guide to overcome such problem and to make good investment decision regarding Mutual fund selection.