+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 ₹53.91
↓ -0.04 ₹6,630 1 -1.6 4.5 17.1 17.4 11.8 Aditya Birla Sun Life Dividend Yield Fund Growth ₹465.16
↑ 0.77 ₹1,437 0.6 0.4 7.8 14.7 13.8 2.3 UTI Dividend Yield Fund Growth ₹179.824
↑ 0.14 ₹3,749 1.4 -1.1 3.9 14.6 12.2 5.3 Templeton India Equity Income Fund Growth ₹138.397
↑ 0.02 ₹2,285 -0.3 -2.2 3 12.7 12.8 1.7 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 7 Aug 26 Research Highlights & Commentary of 4 Funds showcased
Commentary ICICI Prudential Dividend Yield Equity Fund Aditya Birla Sun Life Dividend Yield Fund UTI Dividend Yield Fund Templeton India Equity Income Fund Point 1 Highest AUM (₹6,630 Cr). Bottom quartile AUM (₹1,437 Cr). Upper mid AUM (₹3,749 Cr). Lower mid AUM (₹2,285 Cr). Point 2 Established history (12+ yrs). Oldest track record among peers (23 yrs). Established history (21+ 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: 17.38% (top quartile). 5Y return: 13.76% (upper mid). 5Y return: 12.23% (bottom quartile). 5Y return: 12.83% (lower mid). Point 6 3Y return: 17.06% (top quartile). 3Y return: 14.65% (upper mid). 3Y return: 14.58% (lower mid). 3Y return: 12.68% (bottom quartile). Point 7 1Y return: 4.50% (upper mid). 1Y return: 7.84% (top quartile). 1Y return: 3.86% (lower mid). 1Y return: 3.01% (bottom quartile). Point 8 Alpha: 0.70 (top quartile). Alpha: -1.08 (upper mid). Alpha: -2.28 (lower mid). Alpha: -3.17 (bottom quartile). Point 9 Sharpe: -0.27 (top quartile). Sharpe: -0.37 (upper mid). Sharpe: -0.49 (lower mid). Sharpe: -0.52 (bottom quartile). Point 10 Information ratio: 1.11 (top quartile). Information ratio: 0.28 (lower mid). Information ratio: 0.60 (upper mid). Information ratio: 0.04 (bottom quartile). ICICI Prudential Dividend Yield Equity Fund
Aditya Birla Sun Life Dividend Yield Fund
UTI 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 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 (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 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 (07 Aug 26) ₹53.91 ↓ -0.04 (-0.07 %) Net Assets (Cr) ₹6,630 on 30 Jun 26 Category Equity - Dividend Yield AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 1.86 Sharpe Ratio -0.27 Information Ratio 1.11 Alpha Ratio 0.7 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 31 Jul 21 ₹10,000 31 Jul 22 ₹11,427 31 Jul 23 ₹14,259 31 Jul 24 ₹22,041 31 Jul 25 ₹21,932 31 Jul 26 ₹22,609 Returns for ICICI Prudential Dividend Yield Equity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Aug 26 Duration Returns 1 Month -0.2% 3 Month 1% 6 Month -1.6% 1 Year 4.5% 3 Year 17.1% 5 Year 17.4% 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 Mittul Kalawadia 29 Jan 18 8.51 Yr. Sharmila D'Silva 31 Jul 22 4 Yr. Data below for ICICI Prudential Dividend Yield Equity Fund as on 30 Jun 26
Equity Sector Allocation
Sector Value Financial Services 32.68% Industrials 8.67% Health Care 8.05% Basic Materials 7.47% Energy 7.36% Consumer Cyclical 7.21% Consumer Defensive 6.66% Communication Services 5.53% Technology 5.31% Utility 4.83% Real Estate 2.68% Asset Allocation
Asset Class Value Cash 2.72% Equity 96.97% Debt 0.31% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 22 | HDFCBANK9% ₹575 Cr 7,202,605
↑ 978,029 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 21 | ICICIBANK6% ₹425 Cr 3,090,484 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Apr 21 | SUNPHARMA5% ₹353 Cr 1,896,156
↓ -199,500 Axis Bank Ltd (Financial Services)
Equity, Since 30 Apr 21 | 5322155% ₹300 Cr 2,231,945
↓ -100,000 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 25 | RELIANCE4% ₹266 Cr 2,056,459 NTPC Ltd (Utilities)
Equity, Since 31 Oct 16 | 5325554% ₹244 Cr 6,855,394 Maruti Suzuki India Ltd (Consumer Cyclical)
Equity, Since 31 Jan 22 | MARUTI3% ₹227 Cr 161,010 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Aug 21 | LT3% ₹206 Cr 497,562 InterGlobe Aviation Ltd (Industrials)
Equity, Since 30 Jun 25 | INDIGO3% ₹196 Cr 365,470
↓ -40,050 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Jan 20 | BHARTIARTL3% ₹186 Cr 1,002,916 2. Aditya Birla Sun Life Dividend Yield Fund
Aditya Birla Sun Life Dividend Yield Fund
Growth Launch Date 26 Feb 03 NAV (06 Aug 26) ₹465.16 ↑ 0.77 (0.17 %) Net Assets (Cr) ₹1,437 on 30 Jun 26 Category Equity - Dividend Yield AMC Birla Sun Life Asset Management Co Ltd Rating ☆ Risk Moderately High Expense Ratio 2.21 Sharpe Ratio -0.37 Information Ratio 0.28 Alpha Ratio -1.08 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 31 Jul 21 ₹10,000 31 Jul 22 ₹10,129 31 Jul 23 ₹12,774 31 Jul 24 ₹19,619 31 Jul 25 ₹17,912 31 Jul 26 ₹18,674 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 7 Aug 26 Duration Returns 1 Month 3.1% 3 Month 0.6% 6 Month 0.4% 1 Year 7.8% 3 Year 14.7% 5 Year 13.8% 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 Pavas Pethia 13 May 26 0.22 Yr. Data below for Aditya Birla Sun Life Dividend Yield Fund as on 30 Jun 26
Equity Sector Allocation
Sector Value Financial Services 27.56% Technology 14.77% Consumer Defensive 14.34% Utility 9.38% Consumer Cyclical 8.06% Basic Materials 6.79% Energy 6.21% Industrials 5.87% Health Care 2.85% Communication Services 2.03% Real Estate 1.09% Asset Allocation
Asset Class Value Cash 1.04% Equity 98.96% Top Securities Holdings / Portfolio
Name Holding Value Quantity State Bank of India (Financial Services)
Equity, Since 31 Jul 22 | SBIN5% ₹69 Cr 671,696 NTPC Ltd (Utilities)
Equity, Since 31 Dec 18 | 5325555% ₹69 Cr 1,932,249 Bank of Maharashtra (Financial Services)
Equity, Since 31 Dec 25 | MAHABANK5% ₹66 Cr 7,170,055 Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 31 Dec 14 | MCX4% ₹64 Cr 226,640 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Nov 21 | HINDUNILVR4% ₹60 Cr 281,062 ITC Ltd (Consumer Defensive)
Equity, Since 28 Feb 18 | ITC4% ₹56 Cr 1,963,169 Infosys Ltd (Technology)
Equity, Since 30 Jun 11 | INFY3% ₹46 Cr 462,960 Axis Bank Ltd (Financial Services)
Equity, Since 30 Apr 24 | 5322153% ₹44 Cr 324,148 Bharat Petroleum Corp Ltd (Energy)
Equity, Since 31 Jan 21 | 5005473% ₹38 Cr 1,256,970 Shriram Finance Ltd (Financial Services)
Equity, Since 30 Jun 23 | SHRIRAMFIN3% ₹37 Cr 354,716 3. UTI Dividend Yield Fund
UTI Dividend Yield Fund
Growth Launch Date 3 May 05 NAV (07 Aug 26) ₹179.824 ↑ 0.14 (0.08 %) Net Assets (Cr) ₹3,749 on 30 Jun 26 Category Equity - Dividend Yield AMC UTI Asset Management Company Ltd Rating ☆ Risk Moderately High Expense Ratio 1.99 Sharpe Ratio -0.49 Information Ratio 0.6 Alpha Ratio -2.28 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 31 Jul 21 ₹10,000 31 Jul 22 ₹10,165 31 Jul 23 ₹12,015 31 Jul 24 ₹18,239 31 Jul 25 ₹17,542 31 Jul 26 ₹17,886 Returns for UTI Dividend Yield Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Aug 26 Duration Returns 1 Month 1.4% 3 Month 1.4% 6 Month -1.1% 1 Year 3.9% 3 Year 14.6% 5 Year 12.2% 10 Year 15 Year Since launch 14.6% 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 Amit Premchandani 16 Nov 22 3.71 Yr. Data below for UTI Dividend Yield Fund as on 30 Jun 26
Equity Sector Allocation
Sector Value Financial Services 28.99% Technology 10.81% Consumer Cyclical 10.18% Health Care 10.11% Industrials 8.33% Real Estate 6.12% Utility 5.68% Energy 5.32% Consumer Defensive 4.57% Basic Materials 3.9% Communication Services 3.54% Asset Allocation
Asset Class Value Cash 1.63% Equity 97.82% Debt 0.55% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 May 12 | HDFCBANK9% ₹327 Cr 4,100,000
↑ 100,000 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Sep 07 | ICICIBANK6% ₹213 Cr 1,550,000 State Bank of India (Financial Services)
Equity, Since 31 Mar 23 | SBIN3% ₹128 Cr 1,250,000 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Aug 24 | BHARTIARTL3% ₹111 Cr 600,000 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 30 Jun 23 | M&M3% ₹106 Cr 345,000 Tech Mahindra Ltd (Technology)
Equity, Since 31 May 17 | 5327553% ₹104 Cr 740,000
↓ -20,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Dec 23 | KOTAKBANK3% ₹102 Cr 2,600,000 Power Grid Corp Of India Ltd (Utilities)
Equity, Since 30 Apr 24 | 5328982% ₹90 Cr 3,150,000 Maruti Suzuki India Ltd (Consumer Cyclical)
Equity, Since 30 Apr 25 | MARUTI2% ₹88 Cr 62,000 Infosys Ltd (Technology)
Equity, Since 30 Apr 08 | INFY2% ₹83 Cr 825,000
↑ 100,000 4. Templeton India Equity Income Fund
Templeton India Equity Income Fund
Growth Launch Date 18 May 06 NAV (06 Aug 26) ₹138.397 ↑ 0.02 (0.01 %) Net Assets (Cr) ₹2,285 on 30 Jun 26 Category Equity - Dividend Yield AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.09 Sharpe Ratio -0.52 Information Ratio 0.04 Alpha Ratio -3.17 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 31 Jul 21 ₹10,000 31 Jul 22 ₹11,228 31 Jul 23 ₹13,144 31 Jul 24 ₹19,908 31 Jul 25 ₹18,217 31 Jul 26 ₹18,346 Returns for Templeton India Equity Income Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Aug 26 Duration Returns 1 Month 0.8% 3 Month -0.3% 6 Month -2.2% 1 Year 3% 3 Year 12.7% 5 Year 12.8% 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 Ajay Argal 1 Dec 23 2.67 Yr. Sandeep Manam 18 Oct 21 4.79 Yr. Rajasa Kakulavarapu 6 Sep 21 4.9 Yr. Data below for Templeton India Equity Income Fund as on 30 Jun 26
Equity Sector Allocation
Sector Value Financial Services 19.73% Technology 15.43% Utility 13.07% Consumer Defensive 9.61% Real Estate 9.35% Energy 9.01% Basic Materials 5.7% Consumer Cyclical 5.35% Industrials 4.97% Health Care 2.89% Communication Services 1.71% Asset Allocation
Asset Class Value Cash 3.22% Equity 96.82% Top Securities Holdings / Portfolio
Name Holding Value Quantity State Bank of India (Financial Services)
Equity, Since 30 Jun 25 | SBIN5% ₹123 Cr 1,200,000 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 23 | HDFCBANK5% ₹104 Cr 1,300,000 MediaTek Inc (Technology)
Equity, Since 30 Sep 21 | 24544% ₹101 Cr 80,000 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Mar 26 | ICICIBANK4% ₹96 Cr 700,000 Embassy Office Parks REIT (Real Estate)
-, Since 30 Apr 25 | EMBASSY4% ₹95 Cr 2,166,455 NTPC Ltd (Utilities)
Equity, Since 31 Jan 19 | 5325554% ₹95 Cr 2,650,000 Infosys Ltd (Technology)
Equity, Since 30 Apr 13 | INFY3% ₹72 Cr 720,276 Coal India Ltd (Energy)
Equity, Since 31 Jan 14 | COALINDIA3% ₹66 Cr 1,496,000 ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 21 | ITC3% ₹65 Cr 2,250,000 HCL Technologies Ltd (Technology)
Equity, Since 31 Jan 22 | HCLTECH3% ₹63 Cr 590,000
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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