Top 3 Dividend Yield Mutual Funds Outperforming Category Returns Over the Last 5 Years

Dividend yield mutual funds aim to provide regular income to investors by investing in companies with a consistent history of paying dividends. 

In this blog, we will explore the top dividend yield mutual funds with the highest annualized returns over the past five years. Additionally, we will examine the potential returns from a Rs 10,000 monthly SIP in each fund.

Understanding Dividend Yield Mutual Funds

Dividend yield mutual funds focus on investing in companies that regularly distribute dividends to shareholders. These funds often allocate a significant portion of their assets to Public Sector Undertakings (PSUs), blue-chip companies, utilities, and realty firms, known for their dividend-paying capacity. By investing in these funds, investors can benefit from both capital appreciation and regular income.

Top Dividend Yield Mutual Funds with Highest Annualized Returns

1. ICICI Prudential Dividend Yield Equity Fund – Direct Plan – Growth

• NAV: Rs 55.78
• Investment Allocation: 92.14% in domestic equities (65.75% Large Cap, 6.99% Mid Cap, 7.3% Small Cap), 0.47% in Debt (0.46% Government securities)
• Fund Size: Rs 4,257 crore
• Annualized Returns (5 years): 27.43% (category average: 25.59%)

A monthly SIP of Rs 10,000 in ICICI Prudential Dividend Yield Equity Fund over the last five years would have grown to Rs 14,30,374 as of July 23, 2024.

2. Templeton India Equity Income Fund – Direct Growth

• NAV: Rs 155.20
• Investment Allocation: 73.16% in domestic equities (47.5% Large Cap, 13.12% Mid Cap, 3.75% Small Cap)
• Fund Size: Rs 2,326 crore
• Annualized Returns (5 years): 26.84% (category average: 25.59%)

A monthly SIP of Rs 10,000 in Templeton India Equity Income Fund over the last five years would have grown to Rs 13,23,689 as of July 23, 2024.

3. LIC MF Dividend Yield Fund – Direct Plan – Growth

• NAV: Rs 32.17
• Investment Allocation: 95.25% in domestic equities (42.4% Large Cap, 21.48% Mid Cap, 15.18% Small Cap)
• Fund Size: Rs 241.77 crore
• Annualized Returns (5 years): 26.10% (category average: 25.59%)

A monthly SIP of Rs 10,000 in LIC MF Dividend Yield Fund over the last five years would have grown to Rs 12,68,542 as of July 23, 2024.

Conclusion

Dividend yield mutual funds offer a strategic approach for investors seeking regular income alongside potential capital appreciation. By investing in a diversified portfolio of dividend-paying stocks, these funds can provide a reliable income stream even during market downturns. 

Dreaming of financial freedom? Use our Online SIP Calculator to see how regular investments can add up to grow wealth. Take the first step towards your goals. Calculate now!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.