+91-22-489139095 Best Dividend Yield Funds to Invest in 2025
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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Top 5 Best Dividend Yield Funds to Invest in FY 25 - 26
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2024 (%) ICICI Prudential Dividend Yield Equity Fund Growth ₹53.08
↑ 0.18 ₹5,779 0.6 8.1 0 24.6 29 21 UTI Dividend Yield Fund Growth ₹176.459
↑ 0.87 ₹3,794 -1 8.2 -5.2 21.2 21.6 24.7 Aditya Birla Sun Life Dividend Yield Fund Growth ₹437.49
↑ 2.85 ₹1,432 -3.5 5.7 -11.8 20.6 22 18.2 Templeton India Equity Income Fund Growth ₹136.583
↑ 0.41 ₹2,317 -2.2 3.6 -9.5 19 24.2 20.4 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 3 Oct 25 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 (₹5,779 Cr). Upper mid AUM (₹3,794 Cr). Bottom quartile AUM (₹1,432 Cr). Lower mid AUM (₹2,317 Cr). Point 2 Established history (11+ yrs). Established history (20+ yrs). Oldest track record among peers (22 yrs). Established history (19+ 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: 28.98% (top quartile). 5Y return: 21.57% (bottom quartile). 5Y return: 22.03% (lower mid). 5Y return: 24.19% (upper mid). Point 6 3Y return: 24.63% (top quartile). 3Y return: 21.25% (upper mid). 3Y return: 20.65% (lower mid). 3Y return: 18.98% (bottom quartile). Point 7 1Y return: 0.00% (top quartile). 1Y return: -5.22% (upper mid). 1Y return: -11.79% (bottom quartile). 1Y return: -9.52% (lower mid). Point 8 Alpha: 0.21 (top quartile). Alpha: -4.47 (upper mid). Alpha: -8.77 (lower mid). Alpha: -11.18 (bottom quartile). Point 9 Sharpe: -0.57 (top quartile). Sharpe: -0.93 (upper mid). Sharpe: -1.19 (lower mid). Sharpe: -1.65 (bottom quartile). Point 10 Information ratio: 1.64 (top quartile). Information ratio: 0.84 (upper mid). Information ratio: 0.76 (lower mid). Information ratio: 0.18 (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 (03 Oct 25) ₹53.08 ↑ 0.18 (0.34 %) Net Assets (Cr) ₹5,779 on 31 Aug 25 Category Equity - Dividend Yield AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 1.86 Sharpe Ratio -0.57 Information Ratio 1.64 Alpha Ratio 0.21 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 30 Sep 20 ₹10,000 30 Sep 21 ₹17,694 30 Sep 22 ₹18,607 30 Sep 23 ₹23,915 30 Sep 24 ₹36,721 30 Sep 25 ₹35,524 Returns for ICICI Prudential Dividend Yield Equity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Oct 25 Duration Returns 1 Month 1.3% 3 Month 0.6% 6 Month 8.1% 1 Year 0% 3 Year 24.6% 5 Year 29% 10 Year 15 Year Since launch 15.8% Historical performance (Yearly) on absolute basis
Year Returns 2024 21% 2023 38.8% 2022 9.2% 2021 47.1% 2020 14.1% 2019 -2.9% 2018 -11.9% 2017 40.7% 2016 9.7% 2015 -5.2% Fund Manager information for ICICI Prudential Dividend Yield Equity Fund
Name Since Tenure Mittul Kalawadia 29 Jan 18 7.59 Yr. Sharmila D’mello 31 Jul 22 3.09 Yr. Data below for ICICI Prudential Dividend Yield Equity Fund as on 31 Aug 25
Equity Sector Allocation
Sector Value Financial Services 26.15% Energy 10.74% Consumer Cyclical 8.88% Utility 7.3% Industrials 7.17% Basic Materials 7.13% Consumer Defensive 6.62% Health Care 5.71% Technology 5.26% Communication Services 5.24% Real Estate 2.71% Asset Allocation
Asset Class Value Cash 6.85% Equity 92.91% Debt 0.24% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 21 | ICICIBANK7% ₹398 Cr 2,847,084 NTPC Ltd (Utilities)
Equity, Since 31 Oct 16 | NTPC6% ₹355 Cr 10,849,394 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 22 | HDFCBANK6% ₹344 Cr 3,616,948 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Apr 21 | SUNPHARMA6% ₹321 Cr 2,013,986
↑ 106,985 Axis Bank Ltd (Financial Services)
Equity, Since 30 Apr 21 | AXISBANK5% ₹318 Cr 3,039,180 Maruti Suzuki India Ltd (Consumer Cyclical)
Equity, Since 31 Jan 22 | MARUTI5% ₹301 Cr 203,510
↓ -83,100 Larsen & Toubro Ltd (Industrials)
Equity, Since 31 Aug 21 | LT4% ₹237 Cr 657,138 Oil & Natural Gas Corp Ltd (Energy)
Equity, Since 31 Dec 21 | ONGC4% ₹217 Cr 9,268,322 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Jan 20 | BHARTIARTL4% ₹214 Cr 1,131,395
↑ 160,356 Reliance Industries Ltd (Energy)
Equity, Since 31 Mar 25 | RELIANCE3% ₹167 Cr 1,227,657 2. UTI Dividend Yield Fund
UTI Dividend Yield Fund
Growth Launch Date 3 May 05 NAV (03 Oct 25) ₹176.459 ↑ 0.87 (0.49 %) Net Assets (Cr) ₹3,794 on 31 Aug 25 Category Equity - Dividend Yield AMC UTI Asset Management Company Ltd Rating ☆ Risk Moderately High Expense Ratio 1.99 Sharpe Ratio -0.93 Information Ratio 0.84 Alpha Ratio -4.47 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 30 Sep 20 ₹10,000 30 Sep 21 ₹16,441 30 Sep 22 ₹15,141 30 Sep 23 ₹18,666 30 Sep 24 ₹28,527 30 Sep 25 ₹26,424 Returns for UTI Dividend Yield Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Oct 25 Duration Returns 1 Month 0.6% 3 Month -1% 6 Month 8.2% 1 Year -5.2% 3 Year 21.2% 5 Year 21.6% 10 Year 15 Year Since launch 15.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 24.7% 2023 35.4% 2022 -5.3% 2021 38.8% 2020 18.9% 2019 3.3% 2018 0.5% 2017 28.5% 2016 6.1% 2015 -5.1% Fund Manager information for UTI Dividend Yield Fund
Name Since Tenure Amit Premchandani 16 Nov 22 2.79 Yr. Data below for UTI Dividend Yield Fund as on 31 Aug 25
Equity Sector Allocation
Sector Value Financial Services 26.06% Technology 13.91% Consumer Cyclical 12.34% Health Care 9.43% Consumer Defensive 7.25% Industrials 6.34% Energy 6.13% Utility 5.81% Real Estate 3.99% Basic Materials 3.99% Communication Services 3.61% Asset Allocation
Asset Class Value Cash 0.59% Equity 98.87% Debt 0.54% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 May 12 | HDFCBANK9% ₹343 Cr 3,600,000
↓ -100,000 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Sep 07 | ICICIBANK5% ₹203 Cr 1,450,000
↓ -61,670 Tech Mahindra Ltd (Technology)
Equity, Since 31 May 17 | TECHM4% ₹135 Cr 910,000 Infosys Ltd (Technology)
Equity, Since 30 Apr 08 | INFY3% ₹126 Cr 860,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Dec 23 | KOTAKBANK3% ₹123 Cr 625,000 State Bank of India (Financial Services)
Equity, Since 31 Mar 23 | SBIN3% ₹112 Cr 1,400,000 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 30 Jun 23 | M&M3% ₹112 Cr 350,000
↓ -25,000 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Aug 24 | BHARTIARTL3% ₹108 Cr 570,000
↑ 220,000 Knowledge Realty Trust Units (Real Estate)
-, Since 31 Aug 25 | 5444812% ₹93 Cr 8,717,059
↑ 8,717,059 ITC Ltd (Consumer Defensive)
Equity, Since 30 Nov 07 | ITC2% ₹90 Cr 2,200,000 3. Aditya Birla Sun Life Dividend Yield Fund
Aditya Birla Sun Life Dividend Yield Fund
Growth Launch Date 26 Feb 03 NAV (01 Oct 25) ₹437.49 ↑ 2.85 (0.66 %) Net Assets (Cr) ₹1,432 on 31 Aug 25 Category Equity - Dividend Yield AMC Birla Sun Life Asset Management Co Ltd Rating ☆ Risk Moderately High Expense Ratio 2.21 Sharpe Ratio -1.19 Information Ratio 0.76 Alpha Ratio -8.77 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 30 Sep 20 ₹10,000 30 Sep 21 ₹15,633 30 Sep 22 ₹15,445 30 Sep 23 ₹20,296 30 Sep 24 ₹30,683 30 Sep 25 ₹26,946 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 3 Oct 25 Duration Returns 1 Month 0.8% 3 Month -3.5% 6 Month 5.7% 1 Year -11.8% 3 Year 20.6% 5 Year 22% 10 Year 15 Year Since launch 18.2% Historical performance (Yearly) on absolute basis
Year Returns 2024 18.2% 2023 40.3% 2022 5.2% 2021 36.2% 2020 16.1% 2019 3.5% 2018 -14.6% 2017 33.2% 2016 2.6% 2015 -5.5% Fund Manager information for Aditya Birla Sun Life Dividend Yield Fund
Name Since Tenure Dhaval Gala 1 Apr 22 3.42 Yr. Dhaval Joshi 21 Nov 22 2.78 Yr. Data below for Aditya Birla Sun Life Dividend Yield Fund as on 31 Aug 25
Equity Sector Allocation
Sector Value Financial Services 21.21% Technology 17.14% Consumer Defensive 16.94% Utility 9.27% Consumer Cyclical 8.62% Energy 7.17% Industrials 6.58% Basic Materials 6.03% Health Care 2.26% Communication Services 1.06% Real Estate 0.91% Asset Allocation
Asset Class Value Cash 2.81% Equity 97.19% Top Securities Holdings / Portfolio
Name Holding Value Quantity ITC Ltd (Consumer Defensive)
Equity, Since 28 Feb 18 | ITC6% ₹80 Cr 1,963,169 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 30 Nov 21 | HINDUNILVR5% ₹75 Cr 281,062 Infosys Ltd (Technology)
Equity, Since 30 Jun 11 | INFY5% ₹74 Cr 503,745 NTPC Ltd (Utilities)
Equity, Since 31 Dec 18 | NTPC4% ₹63 Cr 1,932,249 State Bank of India (Financial Services)
Equity, Since 31 Jul 22 | SBIN4% ₹54 Cr 671,696 Tech Mahindra Ltd (Technology)
Equity, Since 31 Oct 18 | TECHM3% ₹48 Cr 321,469 Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 31 Dec 14 | MCX3% ₹43 Cr 58,328 Tata Consultancy Services Ltd (Technology)
Equity, Since 31 Aug 19 | TCS3% ₹38 Cr 123,280 Bharat Electronics Ltd (Industrials)
Equity, Since 28 Feb 18 | BEL3% ₹38 Cr 1,019,949 Coal India Ltd (Energy)
Equity, Since 31 Oct 18 | COALINDIA3% ₹37 Cr 986,155 4. Templeton India Equity Income Fund
Templeton India Equity Income Fund
Growth Launch Date 18 May 06 NAV (01 Oct 25) ₹136.583 ↑ 0.41 (0.30 %) Net Assets (Cr) ₹2,317 on 31 Aug 25 Category Equity - Dividend Yield AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.09 Sharpe Ratio -1.65 Information Ratio 0.18 Alpha Ratio -11.18 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 30 Sep 20 ₹10,000 30 Sep 21 ₹17,224 30 Sep 22 ₹17,627 30 Sep 23 ₹21,588 30 Sep 24 ₹32,787 30 Sep 25 ₹29,600 Returns for Templeton India Equity Income Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Oct 25 Duration Returns 1 Month 1.6% 3 Month -2.2% 6 Month 3.6% 1 Year -9.5% 3 Year 19% 5 Year 24.2% 10 Year 15 Year Since launch 14.4% Historical performance (Yearly) on absolute basis
Year Returns 2024 20.4% 2023 33.3% 2022 5.3% 2021 43.1% 2020 22.9% 2019 5.3% 2018 -8.6% 2017 34.1% 2016 9.4% 2015 -1.6% Fund Manager information for Templeton India Equity Income Fund
Name Since Tenure Ajay Argal 1 Dec 23 1.75 Yr. Sandeep Manam 18 Oct 21 3.87 Yr. Rajasa Kakulavarapu 6 Sep 21 3.99 Yr. Data below for Templeton India Equity Income Fund as on 31 Aug 25
Equity Sector Allocation
Sector Value Utility 21.12% Technology 15.39% Energy 12.19% Real Estate 9.82% Consumer Defensive 9.57% Financial Services 8.33% Industrials 5.66% Consumer Cyclical 5.3% Basic Materials 5.25% Communication Services 1.46% Asset Allocation
Asset Class Value Cash 5.9% Equity 94.09% Other 0.01% Top Securities Holdings / Portfolio
Name Holding Value Quantity NTPC Ltd (Utilities)
Equity, Since 31 Jan 19 | NTPC5% ₹118 Cr 3,600,000
↓ -200,000 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 23 | HDFCBANK5% ₹108 Cr 1,140,000 NHPC Ltd (Utilities)
Equity, Since 31 Mar 20 | NHPC5% ₹104 Cr 13,500,000
↓ -1,620,000 Infosys Ltd (Technology)
Equity, Since 30 Apr 13 | INFY4% ₹101 Cr 686,814 GAIL (India) Ltd (Utilities)
Equity, Since 31 Jan 19 | GAIL4% ₹100 Cr 5,800,000 HCL Technologies Ltd (Technology)
Equity, Since 31 Jan 22 | HCLTECH4% ₹93 Cr 640,932 Embassy Office Parks REIT (Real Estate)
-, Since 30 Apr 25 | EMBASSY4% ₹91 Cr 2,335,000 ITC Ltd (Consumer Defensive)
Equity, Since 30 Sep 21 | ITC4% ₹84 Cr 2,050,000 Oil & Natural Gas Corp Ltd (Energy)
Equity, Since 28 Feb 07 | ONGC4% ₹82 Cr 3,500,000 Brookfield India Real Estate Trust (Real Estate)
-, Since 30 Apr 25 | BIRET3% ₹70 Cr 2,202,489
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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