You’ve likely seen the ticker DIVO popping up in every income-investing forum from Reddit to Seeking Alpha. It’s the "cool kid" of the derivative income world, usually mentioned in the same breath as heavyweights like JEPI or SCHD. But honestly, most people treat the Amplify CWP Enhanced Dividend Income ETF like a simple black box that spits out cash every month.
It isn't.
Actually, DIVO is one of the more nuanced tools in a dividend growth portfolio. It’s an actively managed beast that doesn't just blindly sell options for the sake of a high yield. If you’re looking for a 12% yield that erodes your principal, this isn't your fund. If you want a smoother ride with actual capital appreciation, well, now we’re talking.
Why the Amplify CWP Enhanced Dividend Income ETF is Different
Most covered call ETFs are robotic. They follow an index, sell "at-the-money" calls on 100% of their holdings, and basically chop off their own heads if the market rallies. DIVO is a different animal.
It’s managed by the team at Capital Wealth Planning (CWP), led by Kevin Simpson. Instead of a mechanical algorithm, they use a "tactical" overlay. This means they only write covered calls on individual stocks when it actually makes sense—usually when volatility is high or a stock looks a bit overextended.
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They aren't trying to cover the whole portfolio. Usually, they're only writing calls on maybe 20% to 30% of the holdings. This allows the other 70%+ of the fund to run wild during a bull market. That’s why you’ll see DIVO keep up with the S&P 500 much better than its peers when things are "up and to the right."
The "Double Dip" Income Strategy
DIVO targets two specific streams of money:
- High-quality dividends: 2% to 3% from the actual stocks they own.
- Option premiums: Another 2% to 4% from selling those tactical calls.
When you add it up, you’re looking at a gross annual income target of roughly 4% to 7%. As of early 2026, the trailing 12-month yield has hovered around the 6% range, which is plenty for most folks looking to pay bills without selling shares.
What's Actually Inside the Box?
Don't expect a thousand tiny holdings here. DIVO is concentrated. We’re talking 25 to 35 blue-chip stocks. They aren't buying junk; they’re buying the "Goliaths" of the American economy.
Think of names like Caterpillar (CAT), Microsoft (MSFT), American Express (AXP), and UnitedHealth Group (UNH). These are companies that actually grow their earnings.
The managers screen for return on equity, free cash flow, and management track records. It’s basically a "quality" factor fund with an income-generating superpower attached. Because the portfolio is so lean, every stock matters. If one of their top holdings like RTX Corp has a bad quarter, you’ll feel it more than you would in a broader index fund.
Comparing DIVO to the "Big Two" (JEPI and SCHD)
People love to pit these three against each other, but they’re playing different games.
SCHD is the gold standard for pure dividend growth. It doesn’t use options. It just buys 100 solid dividend payers and waits. Over ten years, SCHD will likely have the most price appreciation, but its yield is lower—usually around 3.5%.
JEPI (JPMorgan Equity Premium Income) is the yield monster. It uses Equity Linked Notes (ELNs) to generate massive cash flow, often hitting 8% to 10%. But JEPI’s upside is significantly capped. If the market rips 20% in a year, JEPI is going to leave a lot of money on the table.
DIVO sits right in the "Goldilocks" zone. It offers more income than SCHD but more growth potential than JEPI. It’s for the investor who wants to have their cake and eat it too.
The Cost of Doing Business
Nothing is free. The Amplify CWP Enhanced Dividend Income ETF carries an expense ratio of 0.56%.
Is that high? Sorta. Compared to a Vanguard index fund at 0.03%, it’s expensive. But you’re paying for the human beings at CWP to manually trade the options and pick the stocks. For an actively managed derivative fund, 0.56% is actually pretty competitive.
The Reality of Risks and Drawdowns
Let’s be real for a second. Covered calls don't protect you from a market crash.
If the S&P 500 drops 20% in a month, DIVO is going down too. The option premiums provide a small "cushion"—maybe a few percentage points of protection—but you are still 100% exposed to the downside of the underlying stocks.
There's also the "Capped Upside" risk. Even though DIVO is tactical, if the managers sell a call on Microsoft and then Microsoft stock rockets 15% in two weeks because of an AI breakthrough, DIVO won't capture all of that gain. You trade some of tomorrow's growth for today's cash. That’s the deal.
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Tax Efficiency (The Not-So-Fun Part)
If you hold DIVO in a taxable brokerage account, be prepared.
Dividends from the underlying stocks are usually "qualified" (taxed at lower rates). However, the income from the covered calls is generally treated as short-term capital gains, which are taxed at your ordinary income rate. For high earners, this can be a bit of a sting.
Many savvy investors prefer to keep DIVO in an IRA or 401(k) to let that monthly income compound without the IRS taking a slice every 30 days.
How to Actually Use DIVO in a Portfolio
You shouldn't just dump your life savings into one ticker. That’s a recipe for a heart attack.
Most experts see DIVO as a "complementary" holding. If you have a core of total market funds (like VTI), you might add 10% to 15% in DIVO to boost your monthly cash flow.
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It’s also great for retirees who need a "bridge" to cover expenses. Instead of selling shares of your growth stocks when the market is down, you can live off the distributions from DIVO. It keeps you from being a "forced seller" during a bear market.
Actionable Next Steps for Investors
- Check your overlap: Use a tool like an ETF overlap visualizer to see if DIVO holds the same stocks you already own in your other funds.
- Determine your "Yield Gap": Figure out how much monthly income you actually need. If your current portfolio yields 2% and you need 4%, DIVO can help close that gap.
- Monitor the VIX: Since DIVO generates more income when volatility (VIX) is high, pay attention to market fear. High-volatility environments are actually where this fund’s management team earns their keep.
- Reinvest vs. Spend: If you don't need the cash right now, turn on DRIP (Dividend Reinvestment Plan). Compounding a 5-6% yield back into more shares of high-quality companies is how real wealth is built over decades.
DIVO isn't a get-rich-quick scheme. It’s a disciplined, active approach to harvesting cash from the world's best companies. It requires a bit of trust in the managers, but so far, their "tactical" approach has proven that humans can still occasionally beat the machines—or at least provide a smoother ride while trying.