Dividendology 对 $DIVO 的判断变化

And third, we have the Amplify CWP Enhanced Dividend Income ETF, stock ticker DIV O, which has a trailing 12-month yield of about 6.12%, but in reality, the forward-looking yield is even higher, and I'll explain why that's the case here in just a moment.

Now, it's important we understand what type of ETF we're looking at here. We're looking at an option income ETF. And I want to be abundantly clear. There's a lot of bad option income ETFs out there. A lot of risky ones with very unsustainable yields. This is not one of those ETFs. This one is very different because it's structured in a way to create very sustainable income. And this is very intentional by the fund managers. And as a result, the dividend is not just sustainable, the performance has been very strong as well. In fact, take a look at the performance over the last year. Despite the fact it's yielding around 6 to 7%, it's slightly outperformed the S&P 500 on a total return basis. Even if we zoom out over the last 5 years, again, it's actually outperformed the S&P 500 on a total return basis. That's extremely rare for an option income strategy.

Well, if we take a close look at the overview over here, we can see there's two potential income streams. DIVO seeks income from dividend-paying stocks and by opportunistically writing covered calls on those stocks. So, they're generating income in two ways. They're generating income from the actual underlying holdings, not just from writing options on the underlying holdings. And when they do write those options, they do it opportunistically. That's important because it means it helps not completely cap the upside.

And if we zoom in, you'll see DIVO, D I V O right here. Now, if we scroll all the way over, here's what we need to pay close attention to. They typically have portfolio options coverage of around 50%. Now, this is incredibly important to understand because why? Well, if you look at most of these option income ETFs, typically you see 100% portfolio options coverage. The vast majority are utilizing close to 100% portfolio options coverage. Why is that so important? Well, if you look at the guide, scroll over, what can you see? This is the percentage of the ETF's underlying portfolio that is overwritten or covered with call options. For example, 50% coverage means only half the portfolio has calls written against it. Now, remember when a fund is using covered calls, what it naturally does is it caps the upside. So, if you're writing covered calls on 100% of the portfolio, the upside is significantly limited, which means typically doesn't climb higher, at least from a net asset value perspective. Now, some people would argue that's okay, I only care about the distributions. But here's the issue with this. If the net asset value continues to climb lower, then the distributions start to go lower as well over time. But when we have a fund like DIVO from Amplify who only uses 50% portfolio options coverage, the result is we get an increasing net asset value.

And look at the result of this. If we jump over to our dividend breakdown sheet and look at the dividend payments, let's take a look at DIVO. What you can see is distributions grow over time with occasionally at the end of the year, we'll see a massive distribution. Why has this happened two times in the fund's history? Well, you have to understand to get the tax status that they want, typically at the end of the year, if the fund has done really well and seen a lot of capital gains, they have to make a larger distribution to get optimal tax status. So, typically when you see a massive distribution at the end of the year, that means the fund from a capital appreciation standpoint has done really well. It's also the reason if you look at the share price for these option income ETFs, occasionally you'll see a relatively large drop that's not typical. Like right here. This is when they made that large distribution. Remember, it's paid out of the net asset value.