DIVO ETF

DIVO, a covered call ETF, underperformed during the 2024 bull market but is now better positioned for a more stable 2025 market. The fund focuses on high-quality dividend stocks, offering lower volatility and higher income compared to traditional index funds. With a 4.9% yield and lower volatility, DIVO is attractive for income-focused investors despite higher expenses.

DIVO has consistently proven itself since its launch in 2016 as a fund that offers 4–7% yields at lower volatilities compared to the overall market. A pandemic environment increased demand for income-oriented investments, leading Pacer ETFs to develop QDPL—a unique fund that offers 4X the S&P 500's yield using dividend futures. Dividend futures are not risk-free. Despite recent outperformance, analysis of long-term backtests suggests that QDPL will perform more similarly to DIVO with higher volatility.

As the ETF landscape continues to expand, more and more firms are crossing over significant AUM thresholds. That includes some now-veteran shops with strong, growing rosters, like Amplify ETFs.

DIVO's tactical covered call strategy offers a balance of income and appreciation, outperforming many high-yielding call option ETFs with a 13.23% YTD increase. DIVO's concentrated portfolio of 44 quality holdings, including AAPL and MSFT, adds diversification and potential for continued outperformance in a lower-rate environment. Despite risks of volatility and capped upside, DIVO's hybrid approach attracts investors seeking both income and capital appreciation, rivaling risk-free assets.

I'm giving the Amplify CWP Enhanced Dividend Income ETF a try because I believe its dividend is sustainable. I'm not so sure about some similar ETFs.

DIVO invests in high-quality U.S. equities and sells covered calls on some of its holdings. The result is an incredibly well-rounded fund, with good dividends, long-term returns, and outperformance during bear markets. It does underperform during bull markets, and should somewhat underperform long term.

Exchange-traded funds are a simple way to build a portfolio, but they don't have to be simple investments. Schwab U.S. Dividend Equity ETF is focused on owning a diversified, high-quality portfolio of high-yield stocks.

On Thursday, Amplify ETFs bolstered its fund library with the launch of the Amplify CWP Growth & Income ETF (QDVO). QDVO's strategy focuses primarily on capital appreciation, with a secondary goal of seeking current income.

Investors can generate income from their portfolios in multiple ways, including selling covered calls. Managing an options portfolio can be complex.