Synopsis: Dividend Yield Mutual Funds invest in companies that are financially stable and pay consistent dividends, ensuring stability along with the possibility for growth. This article highlights the top 5 dividend yield mutual funds in India according to their performance over 3 years.
Dividend Yield Mutual Funds focus on stocks of companies which have a consistent record of declaring dividends. Such stocks are usually those of well-established, cash-flush firms with large market capitalization and value-oriented segments. While pure income schemes earn money from dividend payouts, the current version of dividend yield mutual fund schemes earns its profits mostly from capital gains, and dividends form an additional bonus for investors.
What Are Dividend Yield Mutual Funds?
Dividend Yield Mutual Funds are equity mutual funds that focus on companies that pay dividends consistently or have a dividend yield. They tend to be conservative firms that are quite big and financially healthy. The aim is to generate steady income as well as capital gains over the long term.
- Invest mainly in dividend-paying companies
- Lower volatility compared to mid/small-cap funds
- Focus on stable, established businesses
- Suitable for long-term wealth creation with moderate risk
Top 5 Dividend Yield Mutual Funds In India (3-Year Performance)
1. LIC MF Dividend Yield Fund
- NAV: ₹33.63
- AUM: ₹661.28 Cr
- Expense Ratio: 0.96%
- Exit Load: 1% (within 12 months)
- 3-Year CAGR: 20.4%
2. ICICI Prudential Dividend Yield Equity Fund
- NAV: ₹57.62
- AUM: ₹6,458.00 Cr
- Expense Ratio: 0.61%
- Exit Load: 1% (within 1 month)
- 3-Year CAGR: 19.3%
3. Aditya Birla Sun Life Dividend Yield Fund
- NAV: ₹489.10
- AUM: ₹1,475.17 Cr
- Expense Ratio: 1.34%
- Exit Load: 1% (within 90 days)
- 3-Year CAGR: 17.0%
4. Tata Dividend Yield Fund
- NAV: ₹20.42
- AUM: ₹1,043.89 Cr
- Expense Ratio: 0.67%
- Exit Load:0.50% (within 30 days)
- 3-Year CAGR: 16.8%
5. UTI Dividend Yield Fund
- NAV: ₹184.40
- AUM: ₹3,697.48 Cr
- Expense Ratio: 1.72%
- Exit Load: 1% (within 12 months)
- 3-Year CAGR: 16.4%
Head to head comparison
Note: NAV, AUM, expense ratio, and other fund details are sourced from Groww as of June 8th, 2026.
Who Should Invest in Dividend Yield Mutual Funds?
The Dividend Yield Mutual Funds are meant for investors who would like a balance of risks and rewards by taking up investments that have moderate risks and provide stable returns in the long run. These types of mutual funds are highly recommended to be taken up by long-term investors who wish to make profitable investments in companies that have a good foundation. However, they are not suitable for those targeting aggressive short-term growth or high-risk strategies.
Bottom line
The dividend yield mutual fund category has proven its stability and growth potential, making it an attractive choice for conservative stock investments. The highest performing dividend yield funds have generated a CAGR of up to 20.4% over the past three years. However, past results cannot be considered indicative of future results.
Written by Ameet S
Disclaimer: The information provided in this article is for educational purposes only and should not be construed as financial advice or investment recommendation. Returns mentioned are based on historical performance and may not be sustained in the future. Mutual fund investments are subject to market risks, including potential loss of capital. Investors are advised to assess their risk appetite and financial goals and to consult a certified financial advisor before investing.
