Amplify launched an exchange-traded fund Thursday that offers an international angle on the firm’s most popular strategy.
The Amplify International Enhanced Dividend Income ETF (IDVO) implements a similar strategy to the $1.7 billion Amplify CWP Enhanced Dividend Income ETF (DIVO), but it applies it to the global ex-U.S. universe.
IDVO comes with an expense ratio of 0.65% and lists on the NYSE Arca.
Amplify founder and CEO Christian Magoon cites demand from existing DIVO investors and growing interest in income strategies among the reasons for developing the new ETF.
Like DIVO, IDVO is primarily subadvised by Kevin Simpson and his team at Capital Wealth Planning. The new ETF invests in American depositary receipts that pay dividends while tactically writing covered calls on those holdings as warranted by market conditions. The portfolio will include roughly 30 to 50 securities, according to the prospectus.
IDVO is expected to generate gross income of 3%-4% via the dividend strategy and 2%-4% from the covered call strategy, the document says.
“One of the risks of buying international dividend payers is that international stocks are more likely to curtail or suspend dividends during times of economic distress,” Magoon said. “The upside is you generally get a higher yield from those stocks than you would if you bought U.S. dividend-yielding stocks.”
Amplify’s DIVO has seen its popularity spike amid the uncertainty that has characterized markets during the pandemic. While flows were fairly muted for its first few years of existence, they have accelerated dramatically since 2020, when DIVO pulled in $158 million. It took in $668 million in 2021, and year to date has had inflows of $958 million.
DIVO has also outperformed the SPDR S&P 500 ETF Trust (SPY) during the 12-month and year-to-date periods, with losses of 2.51% and 7.85, respectively. Meanwhile, SPY lost 12.53% and 17.12% during those same respective time spans.
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