DIVO: A Higher Rate Economy Supports The Buy Case

Summary The Amplify CWP Enhanced Dividend Income ETF is rated Buy for investors seeking monthly cash flow with equity upside, contingent on stable leadership. DIVO’s edge derives more from concentrated stock selection and sector allocation than from its selective, low-percentage call writing strategy. Compared to JEPI, DIVO delivered higher compounded returns with similar drawdowns, though it underperformed SPY and matched SCHD’s risk-adjusted returns. I expect a normalized mid-single digit distribution rate and high single to low double digit total returns, with downside protection versus SPY. SunnyGraph/iStock via Getty Images The Amplify CWP Enhanced Dividend Income ETF ( DIVO ) is one of the larger dividend income ETFs, with $7.84 billion of net assets as of September 15. My rating is a Buy for the next 3 to 5 This article was written by Benjamin C. Barry 75 Followers Follow Benjamin Barry is a self-directed investor and research-oriented writer. He has over twelve years of work experience in audit, technology risk, financial controls, and data analysis. This has included a stint at a Big Four firm, working in financial services, and holding several senior roles in business. In investing, he brings this background to bear by being a bit skeptical. He always looks at the underlying data, the hidden assumptions, and how backtested results compare with actual results. He writes on Investing, ETFs, Asset Allocation, Momentum/Trend Following, Options Trading, Income Strategies, Gold/Precious Metals, Real Estate Investing, and Portfolio Risk Management. His focus is on systematic and rules-based approaches. He doesn’t limit himself to any one area; he’ll consider any strategy or security that has favorable risk-adjusted returns and well-understood risks. On his personal portfolio, he’s worked in Growth, Income, Treasuries, Gold, and Options Strategies. He’s interested in repeatable strategies, diversification, controlling drawdowns, and understanding real-world factors such as costs and slippage. His credentials include an MS in Information Systems Audit and Control, an MA in Professional Writing, a BA in English Literature, and he is a Certified Information Systems Auditor. He writes on Seeking Alpha to share his work in a public forum. The purpose is to expose his analysis to outside scrutiny, to demonstrate how to turn high-level concepts into actionable analysis, and to share what works and what doesn’t. This helps his audience avoid succumbing to appealing but ultimately flimsy claims or marketing hype. Analyst’s Disclosure: I/we have a beneficial long position in the shares of DIVO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.