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ETF Specialist

Dividend Investing: Man vs. Machine

Comparing active and passive approaches to dividend investing.

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A version of this article appeared in the October issue of Morningstar ETFInvestor. Download a complimentary copy of ETFInvestor here.

At our sixth annual Morningstar ETF Conference, I moderated a panel on dividend investing. We had a diverse group, featuring Fidelity’s Ramona Persaud (the active manager), WisdomTree’s Jeremy Schwartz (the indexer), and CLS Investments’ Scott Kubie (the ETF strategist). Our conversation centered on whether active managers’ (“man”) can add value relative to a strictly passive (“machine”) dividend-oriented investment strategy. While there is no clear-cut answer, it is evident that successful approaches of both kinds share some commonalities, such as low costs and a disciplined process. While the machines might win on average, it is too simplistic to suggest that there is no hope for man.

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Michael Rawson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.