Two ETFs For Investors Looking For Income & Growth
"Blending Income & Growth Is How You Build Long-Term Wealth"
As you know by my name, I love dividends. And in addition to sharing on here, I write regularly on the investment platform- Seeking Alpha.
My goal there is to teach everyday investors about building wealth, so they won’t to need to work to traditional retirement age.
I want to help you take control of your life, have F.I.R.E.
Here at Dividend Collection Agency the goal is to give investors and/or readers a different perspective. We take a simple approach to building wealth. And although investing may seem easy, people often miss opportunities by over complicating it.
But we are here to help.
For years, I’ve been someone constantly scanning the market for opportunity.
A REIT trading below NAV.
A BDC with improving coverage.
A dividend grower at a compressed multiple.
I enjoy the hunt.
But recently, I’ve been thinking differently.
What if the smartest move going forward isn’t owning 25–30 individual stocks… But instead building around three or four core ETFs and layering in a handful of high-conviction growth names and dividend payers?
Maybe this shift comes with experience. Maybe it’s simply maturity as an investor. And the idea of letting ETFs do most of the heavy lifting is becoming more attractive by the day.
And in a world increasingly driven by AI, scale, and mega-cap dominance, this approach may not just be simpler — it may be smarter.
The ETF Boom Is Structural — Not Cyclical 💥
The first U.S. ETF — the SPDR S&P 500 ETF Trust (SPY) — launched in 1993.
That was only 33 years ago.
Since then, ETF assets have grown at an astronomical rate. What started as a niche product has become the preferred vehicle for millions of investors worldwide.
Why?
Because ETFs offer:
Instant diversification
Low-cost exposure
Transparency
Tax efficiency
Simplicity
As technology continues to evolve and AI reshapes corporate America, access to markets will only become easier. That means more participation. More innovation. And likely more ETF launches.
Covered-call ETFs. Actively managed ETFs. Thematic AI ETFs. Income-focused strategies.
The investment universe continues to expand.
Instead of trying to predict every winner, perhaps owning the system itself is the better bet.
Income Stability with Growth 📈
ETF #1: iShares Core Dividend Growth ETF (DGRO)
Current Price: $73.53
Some investors prefer pure growth. Others prefer high yield.
I believe every portfolio should have exposure to dividend growth.
Why?
Because dividends eliminate the need to sell shares in retirement.
I’ve never liked the idea of being forced to sell assets during market drawdowns just to generate income. A quality dividend ETF allows you to collect cash flow while staying invested.
DGRO focuses on companies with:
At least 5 consecutive years of dividend growth
Sustainable payout ratios (under 75%)
A focus on quality and balance sheet strength
It currently holds nearly 400 stocks, offering broad diversification across sectors.
Its top sector exposures include:
Financials
Healthcare
Technology
That combination matters.
Financials offer yield.
Healthcare offers defensive stability.
Technology provides long-term growth.
Top holdings include companies like:
Microsoft (MSFT)
JPMorgan Chase (JPM)
Procter & Gamble (PG)
Exxon Mobil (XOM)
Johnson & Johnson (JNJ)
These are durable, global businesses with pricing power and scale.
DGRO’s expense ratio is just 0.08% — extremely reasonable for a passively managed strategy.
Since inception in 2014, the fund has delivered strong total returns while growing its dividend meaningfully. Over the long term, it has outperformed many peers due to its tech exposure and quality tilt.
This isn’t a high-yield ETF.
It’s a dividend growth machine.
And that distinction matters.
Growth with an Income Edge 💵
ETF #2: Capital Group Dividend Value ETF (CGDV)
Current Price: $45.70
If DGRO is the stable engine, CGDV is the accelerator.
What makes CGDV interesting is that although it’s a dividend ETF, it behaves more like a growth fund.
Unlike DGRO, CGDV is actively managed and holds a concentrated portfolio of roughly 50–60 stocks. Capital Group uses a multi-manager system where different managers oversee individual sleeves of the portfolio.
That specialization gives it flexibility and conviction.
The fund carries a higher expense ratio (0.33%), but for active management with a strong track record, that’s reasonable.
CGDV currently has heavier exposure to technology and industrials and includes names such as:
Meta Platforms (META)
Broadcom (AVGO)
Microsoft
It also maintains limited international exposure (up to ~10%), which provides diversification if global markets continue to strengthen.
Since launching in 2022, CGDV has significantly outperformed broad large-cap growth ETFs and even the S&P 500 in certain periods.
Its dividend has grown rapidly since inception — but the real story is NAV growth.
This is a dividend ETF built for total return.
When paired with DGRO, you get:
Broad diversification
Dividend growth
Active stock selection
Higher growth exposure
Limited portfolio overlap
That balance is powerful.
The Case for a Core ETF Structure 📊
Imagine a portfolio built like this:
50–60% Core ETFs (DGRO + CGDV + possibly one broad index fund)
20–30% High-conviction growth stocks
10–20% Select dividend or income plays
Instead of managing 30 positions, you’re managing 8–12.
Less noise. More focus. Still diversified.
ETFs allow you to participate in AI adoption, industrial re-shoring, healthcare innovation, and financial sector recovery — without trying to pick every single winner.
Let the fund managers and index methodologies do the filtering.
Your job becomes allocation and discipline.
Risks to Consider ⚠️
No ETF is immune to underperformance.
Both DGRO and CGDV have meaningful exposure to technology. If AI enthusiasm cools or we enter a prolonged market pullback, returns may suffer in the short term.
Active management also introduces manager risk in CGDV.
And dividend growth ETFs can lag in speculative bull markets.
But long-term investing isn’t about chasing what’s hot.
It’s about building something durable.
Bottom Line ✅
I’m not abandoning individual stock research. That’s part of who I am as an investor.
But there’s something compelling about a structure where:
The core compounds quietly
Income grows annually
AI and innovation exposure remains intact
Simplicity reduces mistakes
Sometimes the most sophisticated move is simplifying.
Let the ETFs do the work.
Build around them with conviction.
And allow compounding — not constant trading — to do the heavy lifting.
What’s your investment strategy? Do ETFs or individual companies make up the majority of your portfolio? Let me know in the comments.
Happy Investing!
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Not financial advice. For educational purposes only. I am not a licensed professional. Do your own due diligence.
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