IDVO: A Promising Buy-Write ETF

seekingalpha06-12

Amplify CWP International Enhanced Dividend Income ETF is an actively managed fund with a distribution rate of 6%.The IDVO ETF holds 48 international dividend-paying stocks and sells covered calls on ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIDVO: A Promising Buy-Write ETF\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-12 20:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4698657-idvo-a-promising-buy-write-etf><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Amplify CWP International Enhanced Dividend Income ETF is an actively managed fund with a distribution rate of 6%.The IDVO ETF holds 48 international dividend-paying stocks and sells covered calls on ...</p>\n\n<a href=\"https://seekingalpha.com/article/4698657-idvo-a-promising-buy-write-etf\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"OEF","symbol_name":"标普100指数ETF-iShares","start_time":0,"source_url":"https://seekingalpha.com/article/4698657-idvo-a-promising-buy-write-etf","article_id":"2442382553","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/184327474/image_184327474.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2442382553","pubTimestamp":1718193600,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Amplify CWP International Enhanced Dividend Income ETF is an actively managed fund with a distribution rate of 6%.The IDVO ETF holds 48 international dividend-paying stocks and sells covered calls on ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"OEF":"标普100指数ETF-iShares","VOO":"Vanguard标普500ETF","IVV":"标普500指数ETF","BK4559":"巴菲特持仓","FDN":"First Trust Dow Jones Internet I","SDS":"两倍做空标普500ETF","SH":"标普500反向ETF","BK4550":"红杉资本持仓","UPRO":"三倍做多标普500ETF","IDVO":"AMPLIFY INTERNATIONAL ENHANCED DIVIDEND INCOME ETF","BK4581":"高盛持仓","BK4504":"桥水持仓","SSO":"两倍做多标普500ETF","JEPI":"JPMorgan Equity Premium Income ETF","OVF":"Overlay Shares Foreign Equity ETF","BK4585":"ETF&股票定投概念","VEGA":"AdvisorShares STAR Global Buy-Wr","SPXU":"三倍做空标普500ETF","BK4588":"碎股","DIVO":"Amplify YieldShares CWP Dividend & Option Income ETF","SPY":"标普500ETF","OEX":"标普100","SCHY":"Schwab International Dividend Equity ETF",".SPX":"S&P 500 Index","BK4534":"瑞士信贷持仓"},"translate_title":"IDVO：一只有前途的买入-卖出ETF","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VEGA":1,"SPY":1,"DIVO":1,"FDN":1,"IDVO":1,"SCHY":1,"JEPI":1,"OVF":1,"VOO":0.6,".SPX":0.6,"UPRO":0.6,"SSO":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,"IVV":0.6,"ESmain":0.6},"content_text":"Amplify CWP International Enhanced Dividend Income ETF is an actively managed fund with a distribution rate of 6%.The IDVO ETF holds 48 international dividend-paying stocks and sells covered calls on a few of those stocks.IDVO's track record is short, but promising: it has outperformed an international equity benchmark and some buy-write ETFs, including JEPI.   TommL/E+ via Getty Images IDVO strategy Amplify CWP International Enhanced Dividend Income ETF (NYSEARCA:IDVO) is an actively managed fund launched on 9/8/2022. It has 57 holdings, a distribution rate of 6.03%, a 30-day SEC yield of 2.42% and a total expense ratio 0f 0.66%. Distributions are paid monthly. As described by Amplify ETFs, “IDVO seeks to provide income from international dividend-paying stocks and by opportunistically writing covered calls on those stocks.” The fund invests in dividend-paying ADRs of companies located or organized outside the U.S., and sells U.S.-traded call options on some of these companies. No more substantial information is provided about the strategy. The portfolio turnover rate in the most recent fiscal year was 83%. This article will use as a benchmark an international dividend ETF: Schwab International Dividend Equity ETF (SCHY). Portfolio The portfolio holds 48 stocks and shorts 9 call option contracts on 8 companies, all of them expiring on 6/21/2024. Nonetheless, the largest position (5.46% of assets) is in a treasury fund: Invesco Short-Term Investments Trust Government & Agency Portfolio (AGPXX). The IDVO portfolio is well diversified across sectors, although it is dominated by financials (19.8% of assets), consumer discretionary (16.8%) and energy (15.6%). Other sectors are below 10%.   Sector breakdown (Chart: author; data: Fidelity) The next table lists the top 10 companies on the long side, with fundamental metrics. They represent 31.5% of assets and the heaviest position weighs about 4%, so risks related to individual companies are moderate.   Ticker Name Weight EPS growth %TTM P/E TTM P/E fwd Yield%   MUFG Mitsubishi UFJ Financial Group 4.04% 26.32 12.07 12.58 2.38   IBN ICICI Bank Ltd. 3.86% 25.85 17.48 17.50 0.72   CCJ Cameco Corp. 3.68% 31.89 133.47 62.02 0.16   SMFG Sumitomo Mitsui Financial Group, Inc. 3.23% 16.11 13.10 12.83 2.70   RELX RELX PLC 3.11% 11.66 38.26 28.63 1.65   RACE Ferrari NV 2.91% 38.33 52.74 49.63 0.63   TTE TotalEnergies SE 2.88% 7.34 7.79 7.70 4.61   TM Toyota Motor Corp. 2.63% 91.09 8.20 9.71 2.34   NVO Novo Nordisk A/S 2.62% 52.89 49.47 42.01 0.95   BBVA Banco Bilbao Vizcaya Argentaria 2.55% 38.55 6.86 6.52 5.60   Click to enlarge Then, the table below lists the 8 companies on which the fund has covered calls:   Ticker Name EPS growth %TTM P/E TTM P/E fwd Yield%   BHP BHP Group Ltd. -62.97 20.09 11.03 5.20   BMA Banco Macro SA 510.86 2.24 4.84 7.71   CCJ Cameco Corp. 31.89 133.47 62.02 0.16   IBN ICICI Bank Ltd. 25.85 17.48 17.50 0.72   MMYT MakeMyTrip Ltd. 1976.11 41.01 67.94 0   RIO Rio Tinto Plc -20.52 11.04 9.17 6.37   SCCO Southern Copper Corp. -11.95 36.70 26.45 2.87   TME Tencent Music Entertainment Group 20.04 30.47 24.78 0.96   Click to enlarge From a fundamental point of view, IDVO is a bit more expensive than SCHY regarding the usual valuation ratios and shows significantly better growth rates, as reported in the next table.     IDVO SCHY   Price/earnings TTM 14.12 13.27   Price/book 1.78 1.81   Price/sales 1.54 1.18   Price/cash flow 7.84 6.22   Earnings growth 27.26% 15.60%   Sales growth 10.62% 6.09%   Cash flow growth 6.29% 3.30%   Click to enlarge Data: Fidelity. Performance Since its inception in September 2022, IDVO has outperformed the international benchmark SCHY by over 17% in total return, and it is almost on par with the U.S. benchmark S&P 500 (represented on the chart below by SPDR® S&P 500 ETF Trust (SPY)).   IDVO vs SCHY, SPY since 9/12/2022 (Seeking Alpha) It is only 2% behind SPY in 2024 to date:   IDVO vs SCHY, SPY, year-to-date (Seeking Alpha) However, IDVO price history is short and may not represent the long-term potential of the strategy. Additionally, the part of distributions coming from option premiums depends on market conditions and effectiveness of the methodology. It may vary significantly, making buy-write ETFs inadequate for investors seeking a steady or growing income stream. Competitors The next table compares characteristics of IDVO and four equity ETFs implementing option strategies (2 international and 2 U.S.-focused):  AdvisorShares STAR Global Buy-Write ETF (VEGA) Overlay Shares Foreign Equity ETF (OVF) Amplify CWP Enhanced Dividend Income ETF (DIVO) JPMorgan Equity Premium Income ETF (JEPI).      IDVO VEGA OVF DIVO JEPI   Inception 9/7/2022 9/17/2012 9/30/2019 12/13/2016 5/20/2020   Expense Ratio 0.66% 1.71% 0.98% 0.56% 0.35%   AUM $123.06M $60.12M $17.80M $3.21B $33.61B   Yield TTM 5.54% 1.06% 4.82% 4.58% 7.36%   Click to enlarge IDVO has the second highest trailing 12-month yield behind JEPI. It is the best performer since 9/12/2022 and in 2024 to date, as reported on the charts below.   IDVO vs competitors since 9/12/2022 (Seeking Alpha)   IDVO vs competitors, year-to-date (Seeking Alpha) Takeaway Amplify CWP International Enhanced Dividend Income ETF is an actively managed fund with a portfolio of 48 stocks and short call options on a few of them. The portfolio is well-diversified across sectors and holdings, although 20% of assets are in financials.  The IDVO track record is too short to assess the long-term potential of its strategy, but it is promising. IDVO has outperformed an international dividend benchmark and several buy-write ETFs, including the very popular JEPI. Nonetheless, keep in mind that covered call strategies provide variable distributions and may not be recommended for investors seeking a steady income stream.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2442382553"}