Amplify ETFs has expanded its suite of income-oriented exchange traded fund solutions with launch of the Amplify YieldShares CWP Dividend & Option Income ETF (DIVO).
DIVO seeks to provide investment results, before fees and expenses that correspond generally to the Enhanced Dividend Income Portfolio (EDIP), an existing strategy managed in separate account format by DIVO’s sub adviser, Capital Wealth Planning (CWP).
EDIP complements its dividend paying stock portfolio with an opportunistic covered call writing programme. These two potential sources of income set the strategy apart from traditional dividend-only strategies. The strategy underlying DIVO seeks to produce annual income of 4-7 per cent.
“The DIVO launch is part of our long-term objective to build the Amplify YieldShares suite of income-oriented investment strategies. DIVO’s two-fold income approach may help to hedge traditional dividend investors’ portfolios from a rising rate environment,” says Christian Magoon, ETF industry veteran and CEO of Amplify Investments. “We believe DIVO is a natural complement to the existing Amplify YieldShares Prime 5 Dividend ETF (PFV) and the YieldShares High Income ETF (YYY).”
At any given time, DIVO will invest in 20 to 25 dividend paying stocks as identified in the universe of large-cap, high quality, and blue chip companies from the S&P 500 Index that could, over time, sustain earnings and cash flow growth and increase their dividends. Additionally, the strategy seeks to lower risk and enhance total return by tactically selling short-term call options on some, or all, of the individual stocks in the portfolio.
“We are pleased to begin our partnership with Amplify Investments and expand the availability of the EDIP strategy to a broader market through DIVO,” says Kevin Simpson, CEO of Capital Wealth Planning.
