Amplify Adds DIVO Sequel ETF with International Twist
Heather Bell – ETF.com
Amplify launched an exchange-traded fund Thursday that offers an international angle on the firm’s most popular strategy.
The Amplify International Enhanced Dividend Income ETF (IDVO) implements a similar strategy to the $1.7 billion Amplify CWP Enhanced Dividend Income ETF (DIVO), but it applies it to the global ex-U.S. universe.
IDVO comes with an expense ratio of 0.65% and lists on the NYSE Arca.
Amplify founder and CEO Christian Magoon cites demand from existing DIVO investors and growing interest in income strategies among the reasons for developing the new ETF.
Like DIVO, IDVO is primarily sub advised by Kevin Simpson and his team at Capital Wealth Planning. The new ETF invests in American depositary receipts that pay dividends while tactically writing covered calls on those holdings as warranted by market conditions. The portfolio will include roughly 30 to 50 securities, according to the prospectus.
IDVO seeks to generate gross income of 3%-4% via the dividend strategy and 2%-4% from the covered call strategy, the document says.
“One of the risks of buying international dividend payers is that international stocks are more likely to curtail or suspend dividends during times of economic distress,” Magoon said.
“The upside is you generally get a higher yield from those stocks than you would if you bought U.S. dividend-yielding stocks.”