Dividend yield mutual funds are a popular choice for investors who prefer stability and consistent returns. These funds mainly invest in companies that regularly declare high dividends. Since dividends are paid from profits, such companies are typically well-established and financially strong.
A dividend yield mutual fund is a type of equity mutual fund that focuses on investing in companies known for distributing high dividends. These funds typically allocate 70–80% of their portfolio to such high-dividend-paying stocks. They aim to offer both capital appreciation and a potential income stream for investors.
These funds are ideal for risk-averse investors seeking:
A more stable and less volatile investment option
Exposure to financially strong and reputable companies
A potential additional income through dividends
Since these funds invest in large, profitable companies, they are less vulnerable to short-term market fluctuations.
Fund Name | AUM (₹ Crore) | Expense Ratio | 1Y Returns (%) | 3Y CAGR (%) |
ICICI Pru Dividend Yield Equity Fund | 5400.52 | 0.58 | 9.24 | 30.87 |
LIC MF Dividend Yield Fund | 559.85 | 0.66 | 5.98 | 29.55 |
Aditya Birla SL Dividend Yield Fund | 1470.54 | 1.43 | 1.48 | 28.18 |
HDFC Dividend Yield Fund | 6378.84 | 0.70 | 2.85 | 27.03 |
UTI Dividend Yield Fund | 4010.09 | 1.40 | 5.24 | 25.27 |
Templeton India Equity Income Fund | 2372.54 | 1.23 | 0.90 | 22.28 |
Sundaram Dividend Yield Fund | 894.70 | 1.07 | 0.94 | 22.30 |
Among them, ICICI Prudential Dividend Yield Equity Fund stands out with the highest 3-year CAGR of 30.87%, and a 1-year return of 9.24%, making it a top performer. LIC MF Dividend Yield Fund also shows a healthy 3-year CAGR of 29.55% with a low expense ratio.
Read more: How to Invest One-Time ₹8 Lakh Bonus in Mutual Funds?
Dividend yield mutual funds are a great option for investors looking for steady income from strong, dividend-paying companies. With several funds offering over 20% CAGR over the past 3 years, this category presents a promising opportunity for those aiming for a balanced approach to wealth creation and income generation.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 23, 2025, 9:15 AM IST
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
