Synopsis– Dividend Yield Mutual Funds primarily invest in those stocks which offer high dividend payouts relative to their market price. Amid Market volatility and rising demand in small cap, mid cap and flexi cap mutual funds, traditional dividend yield mutual funds have delivered good results. Below is the list of the top 5 best performing dividend yield mutual funds in 2025.
Here are the list of top performing Dividend Yield Mutual Funds of 2025:
1. ICICI Prudential Dividend Yield Equity Fund Direct Growth
- 5 Year SIP XIRR: 26.21%
- Minimum Lumpsum Investment: ₹5,000
- Minimum SIP Investment: ₹100
- Fund Size (AUM): ₹5,644 Cr (as on 14-07-2025)
- Expense Ratio: 0.57%
- NAV: ₹58.58
- With highest return among the top 5, this fund remains favourite in the dividend yield MF segment.
2. LIC MF Dividend Yield Fund Direct Growth
- 5 Year SIP XIRR: 22.49%
- Minimum Lumpsum Investment: ₹5,000
- Minimum SIP Investment: ₹200
- Fund Size (AUM): ₹613 Cr (as on 14-07-2025)
- Expense Ratio: 0.63%
- NAV: ₹33.56
- This fund with a small Fund Size has given great returns and outperformed benchmark Nifty 500 TRI with good margin.
3. Aditya Birla Sun Life Dividend Yield Fund Direct Growth
- 5 Year SIP XIRR: 20.74%
- Minimum Lumpsum Investment: ₹1,000
- Minimum SIP Investment: ₹100
- Fund Size (AUM): ₹1,523 Cr (as on 14-07-2025)
- Expense Ratio: 1.42%
- NAV: ₹493.27
- This Fund with highest NAV has outperformed NIFTY 500 TRI.
4. Franklin India Dividend Yield Fund Direct Growth
- 5 Year SIP XIRR: 20.18%
- Minimum Lumpsum Investment: ₹5,000
- Minimum SIP Investment: ₹500
- Fund Size (AUM): ₹2,421 Cr (as on 14-07-2025)
- Expense Ratio: 1.23%
- NAV: ₹152.10
- This fund has a good large cap dividend focus with diversification across sectors.
5. UTI Dividend Yield Fund Direct Growth
- 5 Year SIP XIRR: 19.94%
- Minimum Lumpsum Investment: ₹5,000
- Minimum SIP Investment: ₹500
- Fund Size (AUM): ₹4,127 Cr (as on 14-07-2025)
- Expense Ratio: 1.40%
- NAV: ₹191.62
- A large fund size, preferred by investors focusing yield and sectorial spread.
- The Fund Benchmark is NIFTY 500 TRI and it gave a 5 year SIP XIRR return of 17.4%
Also read: Top Performing High-Risk Funds That Delivered High Returns in 2025 – Are They in Your Portfolio?
Why Dividend Yield Mutual Funds
- Reduced Volatility: These funds invest in companies that are mature and financially stable, lowering the volatility exposure of the portfolio.
- Improved Market Corrections: Dividend paying stocks tend to perform better in the times of the market decline.
- Dividend Reinvesting: Compounding benefits through dividend reinvesting.
- Appropriate to Conservative Investors: A good option to investors who prefer exposure in equity but play safe.
Table Showing Top 5 Dividend Yield Funds in 2025
| Fund Name | 5-Yr SIP XIRR (%) | Fund Size (₹ Cr) | ER (%) | NAV (₹) | Min. Lump Sum (₹) | Min. SIP (₹) |
| ICICI Pru Dividend Yield Equity Direct Growth | 26.21% | 5,644 | 0.57 | 58.58 | 5,000 | 100 |
| LIC MF Dividend Yield Fund Direct Growth | 22.49% | 613 | 0.63 | 33.56 | 5,000 | 200 |
| Aditya Birla SL Dividend Yield Direct Growth | 20.74% | 1,523 | 1.42 | 493.27 | 1,000 | 100 |
| Franklin India Dividend Yield Direct Growth | 20.18% | 2,421 | 1.23 | 152.10 | 5,000 | 500 |
| UTI Dividend Yield Fund Direct Growth | 19.94% | 4,127 | 1.40 | 191.62 | 5,000 | 500 |
Final Thoughts
Old School investment strategies like Dividend Yield Mutual Funds have proven that it can deliver strong returns. For investors looking for a combination of capital appreciation, playing it safe and consistent dividend income, these funds offer reliability and good returns. Choose mutual funds as per your goal and risk appetite.
Written by Prajwal Hegde
