On paper, dividend yields funds look good. These are equity funds that aim to invest in high dividend yielding stocks at all times. This ought to generate steady returns even in volatile markets. But this category of funds have been largely comatose; the category's size has been around Rs 5,000 crore over last eight years. Dividend yielding stocks don't see much price appreciation (gains are distributed as dividends, instead of capital re-deployment), hence capital gains, a staple diet for any equity fund, from them are modest. Average returns from dividend yield funds have been less than 8 percent over the last 10-year and 5-year periods.