Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Divident ETF investing can focus on income or on growth. As a result, these strategies can have different risk-reward

profiles. The best funds are carefully constructed to strike the right balance while serving their

mandate. Morningstar has given four dividend ETFs, top marks for pulling it off. Brian Armour is the

director of Passive Strategyies Research for North America

for Morning Star Research Services. Check out my conversation with the ETF investor newsletter editor.

It's good to see you, Brian. Thanks for having me. Well, there are two popular strategies of

dividend, ETF investing. We have income and we have growth. How are these approaches similar

and different? Well, they both use dividends as their signal. So that's going to be the main

similarity between the two, but they use those signals differently. So dividend income is going

to be looking at maximizing the yield from dividend, the actual income stream, the cash flows are coming into

investors' portfolios, whereas dividend growth is using consistent dividend growth over time

to signify the quality of a company, the consistency and profitability of a company

over a long period of time.

And dividend income ETFs tend to target high-yield strategy.

The focus is on income in the present instead of the future.

What are the blind spots that investors need to keep in mind?

So there's always a trade-off when focusing on the present rather than the future.

And so you're giving up some of that appreciation for income today.

And so what ends up happening is you struggle to find growth when you have a higher income stock in your portfolio.

Well, let's zoom in on dividend growth ETFs, where a company, the payouts are expected to increase over time.

Talk about the potential risk in believing that.

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