Amplify ETFs launched an actively managed income-oriented exchange traded fund centered around both dividend stocks and options income garnered through opportunistic covered calls.
On Thursday, Amplify ETFs came out with the Amplify YieldShares CWP Dividend & Option Income ETF (BATS: DIVO). DVIO has a 0.95% expense ratio.
DIVO is an actively managed ETF that will be loosely based on the Enhanced Dividend Income Portfolio (EDIP), an existing strategy managed by Capital Wealth Planning that is made up of mega cap, high quality, blue chip stocks designed to deliver income through selling short-term covered calls against 30% to 60% of underlying holdings to generate additional income.
Kevin Simpson and Josh Smith, each a portfolio manager of CWP, serve as portfolio managers of DIVO and are primarily responsible for the day-to-day management of the Fund.
“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,” Christian Magoon, ETF industry veteran and CEO of Amplify Investments, said in a note.
DIVO will hold between 20 to 25 dividend paying stocks taken from large-cap, high quality, and blue chip companies out of the S&P 500 Index that could, over time, sustain earnings and cash flow growth and increase their dividends.