+91-22-489139095 Best Dividend Yield Funds to Invest in 2026
When spoken about Dividend Yield funds, many investors at first glance think that these funds pay good dividends. But, that’s not these funds stand for. These funds are a part of equity Mutual Funds that invest their major portion of the corpus in dividend yielding stocks. In other words, these funds invest in companies that pay an above-average dividend regularly. As per SEBI norms, the dividend yield fund schemes should invest a minimum 65 percent of its assets in equities, but in dividend yielding stocks.
What are Dividend Yield Funds?
The fund manager of the dividend yield fund tends to invest in companies that have constant cash flows and are in a position to pay dividend regularly and at a stable rate. During a downturn, such companies don’t usually reduce its dividend.
Therefore, such investments make the funds less volatile compared with their growth-oriented peers. The Volatility of these funds, on an average, is lower than both large-cap and multi-cap funds.
A dividend yield fund invests its corpus in stocks that have a dividend yield higher than the average dividend yield of the market. One can say it can be higher than the Nifty 50 or the Sensex. The remaining portion of the fund; that’s 35 percent of the Portfolio can be invested in any stock.
If looked at its drawbacks, dividend yield funds likely underperform the growth funds in the rising market. Ideally, these funds are suitable for conservative investors who want to invest in Equity Funds. Dividend yield funds are less volatile and tend to give good risk-adjusted returns over the long-run.
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Fund Selection Methodology used to find 5 funds
Top 5 Best Dividend Yield Funds to Invest in FY 26 - 27
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2024 (%) ICICI Prudential Dividend Yield Equity Fund Growth ₹53.13
↑ 0.14 ₹6,458 3.9 -2 2.5 18.9 18.7 11.8 UTI Dividend Yield Fund Growth ₹175.495
↑ 0.67 ₹3,750 2.8 -2.6 0.5 16.5 13.1 5.3 Aditya Birla Sun Life Dividend Yield Fund Growth ₹453.63
↑ 1.85 ₹1,475 5 0 1.1 16 14.5 2.3 Templeton India Equity Income Fund Growth ₹137.295
↑ 0.90 ₹2,306 3.8 -1.1 -0.6 14.1 13.7 1.7 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 17 Jun 26 Research Highlights & Commentary of 4 Funds showcased
Commentary ICICI Prudential Dividend Yield Equity Fund UTI Dividend Yield Fund Aditya Birla Sun Life Dividend Yield Fund Templeton India Equity Income Fund Point 1 Highest AUM (₹6,458 Cr). Upper mid AUM (₹3,750 Cr). Bottom quartile AUM (₹1,475 Cr). Lower mid AUM (₹2,306 Cr). Point 2 Established history (12+ yrs). Established history (21+ yrs). Oldest track record among peers (23 yrs). Established history (20+ yrs). Point 3 Top rated. Rating: 1★ (lower mid). Rating: 1★ (bottom quartile). Rating: 3★ (upper mid). Point 4 Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Point 5 5Y return: 18.65% (top quartile). 5Y return: 13.14% (bottom quartile). 5Y return: 14.54% (upper mid). 5Y return: 13.74% (lower mid). Point 6 3Y return: 18.92% (top quartile). 3Y return: 16.50% (upper mid). 3Y return: 15.95% (lower mid). 3Y return: 14.06% (bottom quartile). Point 7 1Y return: 2.49% (top quartile). 1Y return: 0.51% (lower mid). 1Y return: 1.15% (upper mid). 1Y return: -0.59% (bottom quartile). Point 8 Alpha: -0.79 (upper mid). Alpha: -1.00 (lower mid). Alpha: 4.21 (top quartile). Alpha: -3.59 (bottom quartile). Point 9 Sharpe: -0.06 (upper mid). Sharpe: -0.07 (lower mid). Sharpe: 0.24 (top quartile). Sharpe: -0.25 (bottom quartile). Point 10 Information ratio: 1.12 (top quartile). Information ratio: 0.76 (upper mid). Information ratio: 0.47 (lower mid). Information ratio: -0.05 (bottom quartile). ICICI Prudential Dividend Yield Equity Fund
UTI Dividend Yield Fund
Aditya Birla Sun Life Dividend Yield Fund
Templeton India Equity Income Fund
Assets >= 100 Crore & Sorted on 3 Year CAGR Returns.
Why Should you Invest in Dividend Yield Mutual Funds?
A dividend yield strategy is a tool to identify value stocks. As said earlier, the fund manager of these funds tends to invest in firms that have stable cash flows. Usually, these funds have a history of paying high dividends and also sound fundamentals. These companies tend to manage good deliveries across business and economic cycles and exhibit minimal volatility, especially in bear markets. Investors who are planning to invest in dividend yield funds should look at the dividend pay-out history of the fund and see if it has paid dividends consistently.
The investment objective of ICICI Prudential Dividend Yield Equity Fund is to provide medium to long term capital gains and/or dividend distribution by investing in a well diversified portfolio of predominantly equity and equity related instruments, which offer attractive dividend yield Research Highlights for ICICI Prudential Dividend Yield Equity Fund Below is the key information for ICICI Prudential Dividend Yield Equity Fund Returns up to 1 year are on (Erstwhile UTI - Dividend Yield Fund) The investment objective of the scheme is to provide medium to long term capital gains and/ or dividend distribution by investing predominantly in equity and equity related instruments which offer high dividend yield. There can be no assurance that the investment objectives of the scheme will be realised. Research Highlights for UTI Dividend Yield Fund Below is the key information for UTI Dividend Yield Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Dividend Yield Plus) An Open-ended growth scheme with the objective to provide capital growth and income by investing primarily in a well-diversified portfolio of dividend paying companies that have a relatively high dividend yield. Research Highlights for Aditya Birla Sun Life Dividend Yield Fund Below is the key information for Aditya Birla Sun Life Dividend Yield Fund Returns up to 1 year are on An Open-end diversified equity fund that seek to provide a combination of regular income and long term capital appreciation by investing primarily in stocks that have a current on potentially attractive dividend yield. Research Highlights for Templeton India Equity Income Fund Below is the key information for Templeton India Equity Income Fund Returns up to 1 year are on 1. ICICI Prudential Dividend Yield Equity Fund
ICICI Prudential Dividend Yield Equity Fund
Growth Launch Date 16 May 14 NAV (17 Jun 26) ₹53.13 ↑ 0.14 (0.26 %) Net Assets (Cr) ₹6,458 on 30 Apr 26 Category Equity - Dividend Yield AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 1.86 Sharpe Ratio -0.06 Information Ratio 1.12 Alpha Ratio -0.79 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value Returns for ICICI Prudential Dividend Yield Equity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jun 26 Duration Returns 1 Month 1.7% 3 Month 3.9% 6 Month -2% 1 Year 2.5% 3 Year 18.9% 5 Year 18.7% 10 Year 15 Year Since launch 14.8% Historical performance (Yearly) on absolute basis
Year Returns 2024 11.8% 2023 21% 2022 38.8% 2021 9.2% 2020 47.1% 2019 14.1% 2018 -2.9% 2017 -11.9% 2016 40.7% 2015 9.7% Fund Manager information for ICICI Prudential Dividend Yield Equity Fund
Name Since Tenure Data below for ICICI Prudential Dividend Yield Equity Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 2. UTI Dividend Yield Fund
UTI Dividend Yield Fund
Growth Launch Date 3 May 05 NAV (17 Jun 26) ₹175.495 ↑ 0.67 (0.39 %) Net Assets (Cr) ₹3,750 on 30 Apr 26 Category Equity - Dividend Yield AMC UTI Asset Management Company Ltd Rating ☆ Risk Moderately High Expense Ratio 1.99 Sharpe Ratio -0.08 Information Ratio 0.76 Alpha Ratio -1 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value Returns for UTI Dividend Yield Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jun 26 Duration Returns 1 Month 1% 3 Month 2.8% 6 Month -2.6% 1 Year 0.5% 3 Year 16.5% 5 Year 13.1% 10 Year 15 Year Since launch 14.5% Historical performance (Yearly) on absolute basis
Year Returns 2024 5.3% 2023 24.7% 2022 35.4% 2021 -5.3% 2020 38.8% 2019 18.9% 2018 3.3% 2017 0.5% 2016 28.5% 2015 6.1% Fund Manager information for UTI Dividend Yield Fund
Name Since Tenure Data below for UTI Dividend Yield Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 3. Aditya Birla Sun Life Dividend Yield Fund
Aditya Birla Sun Life Dividend Yield Fund
Growth Launch Date 26 Feb 03 NAV (16 Jun 26) ₹453.63 ↑ 1.85 (0.41 %) Net Assets (Cr) ₹1,475 on 30 Apr 26 Category Equity - Dividend Yield AMC Birla Sun Life Asset Management Co Ltd Rating ☆ Risk Moderately High Expense Ratio 2.21 Sharpe Ratio 0.24 Information Ratio 0.47 Alpha Ratio 4.21 Min Investment 1,000 Min SIP Investment 1,000 Exit Load 0-365 Days (1%),365 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value Returns for Aditya Birla Sun Life Dividend Yield Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jun 26 Duration Returns 1 Month 0.1% 3 Month 5% 6 Month 0% 1 Year 1.1% 3 Year 16% 5 Year 14.5% 10 Year 15 Year Since launch 17.8% Historical performance (Yearly) on absolute basis
Year Returns 2024 2.3% 2023 18.2% 2022 40.3% 2021 5.2% 2020 36.2% 2019 16.1% 2018 3.5% 2017 -14.6% 2016 33.2% 2015 2.6% Fund Manager information for Aditya Birla Sun Life Dividend Yield Fund
Name Since Tenure Data below for Aditya Birla Sun Life Dividend Yield Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 4. Templeton India Equity Income Fund
Templeton India Equity Income Fund
Growth Launch Date 18 May 06 NAV (16 Jun 26) ₹137.295 ↑ 0.90 (0.66 %) Net Assets (Cr) ₹2,306 on 30 Apr 26 Category Equity - Dividend Yield AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.09 Sharpe Ratio -0.25 Information Ratio -0.05 Alpha Ratio -3.59 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value Returns for Templeton India Equity Income Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jun 26 Duration Returns 1 Month 1.4% 3 Month 3.8% 6 Month -1.1% 1 Year -0.6% 3 Year 14.1% 5 Year 13.7% 10 Year 15 Year Since launch 13.9% Historical performance (Yearly) on absolute basis
Year Returns 2024 1.7% 2023 20.4% 2022 33.3% 2021 5.3% 2020 43.1% 2019 22.9% 2018 5.3% 2017 -8.6% 2016 34.1% 2015 9.4% Fund Manager information for Templeton India Equity Income Fund
Name Since Tenure Data below for Templeton India Equity Income Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Asset Allocation
Asset Class Value Top Securities Holdings / Portfolio
Name Holding Value Quantity
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FAQs
1. What are the SEBI guidelines for dividend funds?
A: As per the SEBI guidelines in dividend funds, investments must be made only in companies that provide investors with high dividends. Additionally, under this scheme, 65% of the assets must be invested in high dividend-yielding stocks.
2. What should I know before investing in dividend funds?
A: Dividend funds have been known to produce high returns. Some funds have been known to produce an annual return of 21%. However, investors must be prepared to take moderate to high risks when Investing in dividend funds.
3. Who is best suited to invest in dividend funds?
A: Wealth managers suggest that investors should be prepared to look at an investment period of 5 years for dividend funds to produce the desired returns.
4. Why should I invest in UTI Dividend Yield Fund?
A: The UTI Dividend Yield Fund is one of the best performing dividend funds. It has produced excellent returns in the past five years. The UTI Dividend Yield Fund has demonstrated a Compounded Annual Growth Rate or CAGR of 3.33%. So if you are to invest Rs.80,000 now, you can expect a total return of Rs 94,237.15 at the end of 5 years.
5. What is the Principal Dividend Yield Fund?
A: It consists of a diversified portfolio of companies that have been known to provide excellent dividends to investors. The particular fund has been known to produce returns of 9.56% on a 7-year basis. The company has a diversified portfolio of investments in high and mid-cap companies.
6. Can I invest in dividend funds online?
A: Yes, you can invest online. You will have to log-in to the financial institution's account offering the service, upload a copy of your PAN Card, Aadhar card, and Bank details. Once you have completed the registration process, you can invest in dividend funds online.
7. Why should I invest in dividend funds?
A: It is ideal for those who want to earn passive income. This will help you achieve regular income, even if it is low. Thus, to secure your investment and generate good investment habits, you should invest in dividend funds.
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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Good information.. Should I invest in hdfc dividend yield fund whose nfo is open till 11th