There's nothing magical about dividends. Companies paying high dividends do so at the expense of growth which means that their stock prices tend to go up slower than the rest of the stock market. And as an investor, there's no reason to favor one type of return over another. Dividends and capital gains are both taxed at the same rate and neither is inherently better for passive income. You're mostly just trading one type of growth for another, but you may be less diversified if you just buy high dividend stocks or high dividend funds.

An important advantage of getting more of your returns in the form of capital gains is that you decide when to sell and take capital gains while you're forced to pay taxes frequently with dividends. High dividend funds are less tax-efficient because more of your return is being taxed along the way.