DIVO's focus on high-quality, dividend-oriented stocks and active management makes it a resilient choice in the volatile 2025 market. The ETF's diverse sector allocation and option overlay strategy enhance its income potential, offering a steady 4.78% yield. Despite some distributions coming from the return on capital, DIVO's performance and adaptability justify a buy rating.
The current economic slowdown, marked by layoffs and falling consumer spending, is expected to increase market volatility, making investing more challenging yet opportunistic. Covered-call funds, which benefit from increased volatility, have evolved significantly and offer diverse income options for investors. DIVO, a covered-call ETF, selectively sells out-of-the-money call options on 20% of its holdings, aiming for 2-4% income from these strategies.
When I started investing, my investment choices were pretty limited. Today, with the advent of exchange-traded funds (ETFs), there is more that investors can do, and the costs are attractively cheap.
DIVO offers conservative investors a balanced approach with moderate yield and capital appreciation, outperforming other high-income ETFs during market volatility. DIVO's portfolio construction and covered call strategy provide risk mitigation, evidenced by its smaller decline compared to SPY and QQQ during recent market downturns. Despite risks like concentrated holdings and macroeconomic factors, DIVO's focus on dividend-paying U.S. equities and tactical covered calls supports continued dividend growth.
Exchange-traded funds employing covered-call options provide high monthly income and are becoming more popular with investors.
The Amplify CWP Enhanced Dividend Income ETF offers a unique strategy combining dividend growth stocks with a tactical covered call approach. Despite its innovative strategy and active management, DIVO's performance and volatility metrics do not significantly outshine its peers, warranting a hold rating. DIVO's dividend yield faced issues in 2022, highlighting potential risks, and its strategy lacks transparency, making it less predictable for investors.
Retirement planning can feel overwhelming, but small adjustments like delaying retirement or focusing on high-income investments can make a big difference. In this article, I share three strategies that balance income and safety, perfect for retirees who need consistent cash flow without excessive risk. Whether you're behind on savings or just want peace of mind, these ideas can help you build a retirement plan that works for your needs.
I have been long DIVO since July 2023 and captured 27%+ returns. After assessing other covered call names such as JEPQ, FEPI and JEPI, I have started to question the motivation for being invested in DIVO. In this article I explain why I see no strategic rationale for heavily investing in DIVO, especially for those already holding high-quality, income-producing businesses.
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.