IDVO – Amplify International Enhanced Dividend Income ETF is a new fund from AmplifyETFs that, per their website, invests in high-quality international large and mid-cap companies through American Depositary Receipts (ADRs) with a history of dividend and earnings growth, along with a tactical covered call strategy on individual securities.
IDVO is the international version of the popular DIVO ETF. I did an overview and analysis of DIVO here. The two funds have similar selection methodologies.
From the funds website:
IDVO – Amplify International Enhanced Dividend Income ETF Selection Methodology
- Dividend Growers – Identifying ADRs of high-quality large-cap companies from the MSCI ACWI ex USA Index that are expected to sustain their earnings and cash flow growth, and increase their annual dividends consistently
- Sector Allocation – pick industry sectors or countries that appear to be outperforming relative to the overall market and over-weights those sectors or countries
- Security Selection – consists of 30-50 stocks, which are screened and adjusted according to attributes including earnings, cash flow, return on equity, and management track record.
- Tactical Covered Call Writing – covered call options are written on individual stocks on a tactical basis (not an index approach)
The strategy seeks to provide gross annual income of approximately 3-4% from dividend income and 2-4% from option premiums.
Highlights:
Fund started 09/08/2022
Expense Ratio: 0.65%
Current Yield: 6.01% (as of 10/31/2022)
Payment Dates: Monthly
Dividend payment is variable each month and is paid at the end of the month. Since the fund is new, there have only been two dividends paid so far.
Sept – $0.12365
Oct – $0.12135
Investments held in the fund:
65 holdings
Top 10 are 28.53% of the fund
- Tenaris SA 3.29%
- Petroleo Brasileiro SA 3.23%
- Ambev SA 3.07%
- Diageo PLC 2.93%
- Sociedad Quimica y Minera 2.85%
- Gold Fields Ltd 2.80%
- ICICI Bank Limited 2.78%
- Equinor ASA 2.76%
- Banco Bilbao Vizcaya Argentari 2.47%
- America Movil SAB 2.35%
Sector Weightings:
Sectors Weight
- Materials 17.00%
- Financials 17.00%
- Technology 15.00%
- Energy 14.00%
- Healthcare 11.00%
- Consumer Staples 9.00%
- Communication Svcs 6.00%
- Consumer Discretionary 5.00%
- Industrials 4.00%
- Utilities 2.00%
Country Allocation:
Country Allocation Weight
- United Kingdom 21.00%
- India 9.00%
- Taiwan 8.00%
- Japan 8.00%
- Luxembourg 7.00%
- Brazil 7.00%
- Switzerland 7.00%
- France 4.00%
- Netherlands 4.00%
- Other Countries 25.00%
Amplify International Enhanced Dividend Income ETF Commentary:
This brand new ETF from the same company as DIVO has great appeal. With a similar selection methodology and option writing process, I expect this fund to operate similarly. DIVO is one of my favorite ETFs as the management team has selected top quality dividend growth companies and pairs that with a selective option writing process to enhance the distributions.
I like the international focus of this fund as the valuations of international stocks have tended to be lower than those in the United States and the options premiums received on these international stocks should have higher premiums than U.S. companies. This fund may provide a good diversification for those with a high current percentage of funds in U.S. companies.
Distributions from this fund may have different tax implications depending on the classification of distributions as return of capital, net investment income, and dividends. A statement will be provided annually detailing the breakdown of the distribution type.
As IDVO – Amplify International Enhanced Dividend Income ETF is brand new, there is not an established history of returns. The yield is around 6% right now and based on the managed distribution policy the monthly dividend should be steady, providing a good source of monthly income
Disclosure: I do not own this fund but am closely monitoring for a potential investment.