IDVO: A Unique Spin On International Income Investing

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Tom WernerHome bias is real, and most people feel far more comfortable investing in their own country than outside of it, despite what should be strong diversification potential by putting money to ...

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If you’re not among those types of investors and are looking for not just international exposure, but also some juiced-up yield through an options overlay strategy, then you may want to consider the Amplify CWP International Enhanced Dividend Income ETF (NYSEARCA:IDVO). This ETF aims to give investors a chance to buy into top-notch international companies that pay good dividends and might also grow in value. All while writing covered calls to amp up the distribution potential of the overall portfolio. This is an active fund in the way positions are chosen, with the portfolio managers focused on bottom-up fundamental analysis through screening for companies with sustainable earnings and cash flow, top down sector positioning to help guide where to over or underweight, and tactical call writing to enhance total return.   amplifyetfs.comA Look At The Holdings When we look at the holdings, we find that no position makes up more than 4.1% of the overall portfolio. Fairly well spread out overall.   amplifyetfs.com What do these companies do? SAP SE leads the world in enterprise application software. RELX supplies information-based analytics and decision tools to professional and business clients worldwide. ICICI is a top Indian bank that plays a big role in financial services. Philip Morris International, known for its high dividend yield, gives investors a chance to invest in the consumer staples sector. And Teva Pharmaceutical Industries Ltd gives investors a chance to tap into healthcare—a sector that often shows strength and room for growth. Sector and Global Allocation The sector mix is well spread out. Financials (which often make up a big chunk of international portfolios) make up 21% of the fund and hold the largest allocation, followed by Consumer Discretionary and Energy.   amplifyetfs.com As to the global mix, Japan and the UK make up the largest weightings at roughly 13% each. Overall, though, very nicely spread out across multiple geographies. If you want something well diversified internationally, this certainly fits the bill.   amplifyetfs.com Peer Comparison When you stack up IDVO against similar ETFs, a few things make it unique. Unlike many funds that zero in on international dividends, IDVO uses a covered call strategy. This has an impact on its power to create more income. This sheds light on the current 6.03% distribution rate more than the actual dividend focus. That said, if we pit IDVO against the iShares MSCI EAFE ETF (EFA), which serves as a good yardstick for international investing, we see that IDVO has lagged behind on a total return basis over the past two years. This doesn't mean it's bad, but it reminds us how tough active management can be.   stockcharts.comPros and Cons  On the plus side, this fund lets you invest in foreign companies that pay dividends, helping you to spread your money beyond your own country's markets. This strategy can boost your earnings and reduce your risk. Another benefit is the covered call method, which generates extra income. This approach can stabilize your returns during market turbulence. What's more, the fund's emphasis on high-quality companies with growth potential aligns well with a long-term investment strategy. But we need to consider the downsides too. The covered call strategy generates income, but it may limit gains during rapid market upswings. Investors should also be aware of the risks associated with international investments, such as fluctuations in currency rates and global political challenges. Finally, the fund's expense ratio of 0.66% exceeds that of some passive ETFs, which might reduce returns over the long term. Conclusion  Overall, I'd say this is an interesting fund worth considering. Covered call strategies have been hot lately, especially among the retail community. The Amplify CWP International Enhanced Dividend Income ETF is clearly trying to get in on some of that demand while giving longer-term investors the ability to diversify while focusing on income. The fund's method of filtering for dividend-focused companies, alongside the covered call approach, offers a special mix of income and growth possibilities. I think it’s an interesting fund overall and worth considering.","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/2466860927"}