Top dividend yield mutual funds in India
Ranked by 7-year rolling returns, downside risk, and consistency — not recent returns alone.
Fund Name
7yr Rolling Returns
Risk of Below FD Returns
Consistency Of Performance
Icici Prudential Dividend Yield Equity Fund
17%
Very High
Strong
12 years old
Hdfc Dividend Yield Fund
-
Very Low
Good
5 years old
Franklin India Dividend Yield Fund
17%
Medium
Average
20 years old
Lic Mf Dividend Yield Fund
18%
Very Low
Good
7 years old
Sundaram Dividend Yield Fund (formerly Known As Principal Dividend Yield Fund)
16%
Low
Average
21 years old
All 10 dividend yield funds are loaded — tap to expand
How these funds are ranked
Dividend yield funds invest in companies that pay regular dividends. DrFin ranks them on rolling returns, downside risk, and consistency to find funds that deliver steady compounding over time.
7yr rolling returns
Average across all 7-year windows since Jan 2015 — not start-to-today
Below FD risk
% of 3-year periods where returns fell below a fixed deposit (7%)
Consistency
How often each fund ranked in the top half of its dividend yield peers
Fund age
Older funds have more data across market cycles — more reliable signals
FAQs
What is a Dividend Yield fund?
Dividend yield funds invest in companies that pay regular, above-average dividends — typically mature businesses with steady cash flows.
How risky are Dividend Yield funds — how much can they fall?
Dividend Yield funds carry Medium risk.
Historically, the worst peak-to-trough fall in this category has been around 36%, with an average market correction fall of 24% (vs 21% for the benchmark). Recovery from major falls has taken around 22 months on average.
Investors holding Dividend Yield funds for 3 years earned less than FD returns in approximately 14% of periods. Longer holding periods significantly reduce this risk.
What returns can I realistically expect from Dividend Yield funds?
Across all rolling 5-year periods, Dividend Yield funds delivered:
•
Typical (average) return: 16% p.a.
•
Best historical outcome: 32% p.a.
•
Worst historical outcome: -1% p.a.
The probability of earning less than FD returns over a 3-year period has historically been 14%.
Recent trailing returns can be misleading — use the full range of historical rolling returns for a realistic picture.
How long should I stay invested in Dividend Yield funds?
The minimum recommended holding period for Dividend Yield funds is 5+ years.
Historically, the probability of earning less than FD returns decreased significantly with longer holding periods:
•
3 years: 14% chance of below-FD return
•
5 years: 7% chance of below-FD return
•
7 years: 0% chance of below-FD return
Investors who cannot commit to at least 5+ years should consider lower-risk alternatives.
How do I choose the best Dividend Yield fund?
The most common mistake: picking the fund with the highest 1- or 3-year return. Recent returns are heavily influenced by timing, not skill.
What to look for instead:
•
Rolling return consistency: how did the fund perform across all periods, not just the recent window?
•
Downside protection: how much does the fund fall during market corrections? Look at maximum drawdown and downside capture.
•
Benchmark consistency: what % of rolling periods did the fund beat its benchmark?
•
Expense ratio: for active funds, prefer below 1.5%; index funds typically charge 0.1–0.2%
•
AUM and track record: prefer funds with ₹500+ crore AUM and 7+ years of history
What to avoid:
•
Chasing the top-ranked fund from last year
•
Selecting based on star ratings alone — ratings lag and change
•
Ignoring the expense ratio in long-term compounding
Home
Find Fund
Portfolio
Fund Detail
Compare