Amplify YieldShares CWP Price, Forecast, Insider, Ratings, Fundamentals & Signals

Chicago, aug. 29, 2023 (globe newswire) -- amplify etfs announces august income distributions for its etfs.

The Amplify CWP Enhanced Dividend Income ETF offers a hybrid approach to generating income and capital appreciation. DIVO has outperformed bond funds over the past 5 years, with a total return of 60.12%. As interest rates decline, DIVO may become a popular alternative for investors seeking income-generating assets.

Since the publication of my article back in mid-2023, the Amplify CWP Enhanced Dividend Income ETF has performed in line with other dividend-focused vehicles. Yet, as I indicated in the article, DIVO has failed to register alpha relative to the S&P 500 due to the limitations stemming from its covered call strategy. Now, the rise in the VIX and increased market volatility provide a more sustained base for option richness, allowing DIVO to generate more sizeable cash flows.

Amplify's Enhanced Dividend ETF offers a higher dividend yield compared to alternatives like SCHD and VIG. DIVO focuses on large cap growth and value stocks with a history of growing dividends. The fund also uses an option strategy with covered calls. DIVO provides monthly dividend distributions, making it ideal for investors nearing or in retirement who rely on income.

DIVO is a U.S. dividend income ETF focusing on blue-chip stocks, and selling covered calls on a small portion of its holdings. It offers investors an above-average 4.6% yield, and a reasonably good performance track-record. Potential capital gains are strong too, unlike most covered call and bond ETFs.

Covered call ETFs and strategies remain in focus. The JPMorgan Equity Premium Income ETF (JEPI) gathered $13 billion in 2023, despite rising just 10% in value.

Research suggests that high-yield covered call strategies underperform low-yield strategies, leading to lower total returns. Covered call ETFs with higher yields have a greater negative equity exposure, resulting in lower expected returns. There is a positive relationship between the derivative yield and the expected volatility risk premium return, but this is overshadowed by the negative equity impact.

DIVO is an ETF that combines strong dividend companies with a covered call strategy for steady income and possible equity appreciation. DIVO has robust three-year returns and offers liquidity and sector diversification, making it suitable for various market conditions. DIVO's unique blend of income generation and active management makes it an appealing option for income-focused investors.

It's been the year of active equity ETFs, the year of covered call ETFs, and a year when growth and quality has mattered most in the equity market. All of this is now clear from the year-to-date net inflows and fund performance records.

VettaFi's Head of Research Todd Rosenbluth joins Chuck Jaffe to discuss what investors should consider when evaluating ETFs and what's in favor in the current environment on this special episode of ETF of the Week. This was originally featured on a segment “Money Life” with Chuck Jaffe.

Amplify CWP Enhanced Dividend Income ETF (DIVO) has a dividend yield close to 5% with limited covered call writing. DIVO's holdings consist mostly of Dow Jones Index components, which may result in performance matching that of the Dow Index. While DIVO holds stocks with a strong history of dividend growth, its own dividend distribution history has been disappointing.