LIC MF Dividend Yield Fund

LIC MF Dividend Yield Fund has delivered strong SIP XIRR of 16.38% over 3Y and 22.16% over 5Y, beating the category averages of 16.19% and 17.52% respectively. Against the NIFTY 50, the fund shows consistent positive alpha across all periods, including 11.28% over 3Y and 8.33% over 5Y, with lump-sum CAGR of 17.74% versus the benchmark's 6.46% over 3Y. However, the 1Y XIRR of 14.38% trails the 5Y and 7Y figures, reflecting a softer recent period with a -1.01% calendar return in 2026.

The fund exhibits defensive characteristics with downside capture below 100% across all periods (86.3% over 1Y, 80.28% over 7Y), meaning it loses less than the NIFTY 50 in falling markets. Beta declines from 0.989 at 1Y to 0.8121 at 10Y, indicating progressively lower market sensitivity over longer horizons. The maximum drawdown of -0.33% with a 32-day duration and recovery in 140 days suggests limited recent drawdown stress, though 3 drawdown events exceeding 10% have occurred historically.

The portfolio holds 55 stocks with a well-diversified top 10, where the largest position is only 4.58% (Avalon Technologies) alongside HDFC Bank at the same weight. Banks form the largest sector exposure at 14.8%, followed by Electrical Equipment at 7.6%, providing a dividend-oriented tilt toward financials and industrials. No single sector exceeds 15%, indicating reasonable diversification without excessive concentration risk.

The fund outperforms the category average SIP XIRR at 1Y (14.38% vs 9.93%), 5Y (22.16% vs 17.52%), and 7Y (18.80% vs 17.08%), with only a marginal 3Y gap (16.38% vs 16.19%) in its favor. Calendar year returns show strong consistency, with gains of 25.68% to 33.37% in 2020, 2021, 2023, and 2024, and only mild losses in 2022 and 2026. This combination of above-category returns and low downside capture positions it favorably among dividend yield peers.

This fund suits conservative-to-moderate investors seeking equity exposure with lower downside risk, given its sub-100% downside capture and dividend yield orientation. A horizon of 5 years or more is appropriate, as the 5Y and 7Y XIRR figures of 22.16% and 18.80% demonstrate the benefit of longer holding periods. Investors should tolerate periods of flat or negative returns, such as the -1.01% in 2026 and -1.41% in 2022, in exchange for long-term outperformance.

• Consistent positive alpha versus NIFTY 50 across all measured periods, ranging from 3.06% (15Y) to 11.28% (3Y)
• Superior downside protection with downside capture of 76.42% to 92.89% across periods, cushioning losses in weak markets
• SIP XIRR above category averages at 1Y, 5Y, and 7Y horizons, including a standout 22.16% over 5Y versus 17.52% for the category

• Recent performance has softened, with a -1.01% calendar return in 2026 and 1Y XIRR of 14.38% well below the 5Y figure of 22.16%
• Upside capture below 100% over longer periods (85.13% at 10Y) means the fund may lag the benchmark meaningfully in strong bull markets