COMMENTARY
The equity markets began February on a positive note, buoyed by early optimism about the changing administration, but the mood shifted as inflation fears resurfaced and uncertainty over potential tariffs escalated. Concerns about rising consumer prices, driven by proposed trade policies, rattled investors, leading to a significant sell-off in the back half of the month. This uncertainty was mirrored by a sharp spike in the CBOE Volatility Index (VIX) which crossed above 20 near month-end, its highest level since mid-December. Investor attention will likely remain fixed on tariff announcements and the shifting geopolitical landscape in the weeks ahead.
The hallmarks of the Amplify CWP Enhanced Dividend Income ETF (DIVO) – high-quality dividend paying companies paired with a tactical covered call approach – tend to shine brightest when the broader equity markets experience some turbulence. During February, DIVO returned -0.36% while the benchmark, the S&P 500 Index, returned -1.30% and the CBOE S&P 500 BuyWrite Index (BXM) returned -0.56%. The biggest contributor to returns from a sector perspective was Financials (+1.22%), Energy (+7.49%) and Communication Services (+1.39%).1 Health Care (-2.71%) contributed the least to the return followed by Industrials (-1.44%). Positions that contributed most significantly included Amgen (AMGN), CME Group (CME) and Visa (V) while UnitedHealth (UNH) and Caterpillar (CAT) were among the biggest detractors. Shares of UnitedHealth have been volatile in recent months, dropping in December after an executive was killed, rebounding sharply in January only to come back into headlines this month with a potential investigation into pricing policies.
During the month, Salesforce (CRM) was added to the portfolio. They recently initiated a dividend and as the AI race evolves, CRM may benefit from an AI application perspective. While CRM is more expensive on a relative valuation to other holdings it’s attractive relative to historical levels and peers within the Technology sector. In addition, revenue growth, free cash flow, margin expansion and share buybacks all add to the appeal. McDonalds (MCD) was also added to in February while UnitedHealth (UNH) was reduced in light of the DOJ investigation. From a sector perspective, the Fund maintained an overweight to Financials and underweight to Information Technology, as many of the companies in that sector don’t meet the criteria to be included in the Fund.
From an option standpoint the increase in volatility created an opportunity to be more active in call writing with new calls sold during the month on Amgen (AMGN), Freeport-McMoRan (FCX), Microsoft (MSFT), TJX Companies (TJX) and UnitedHealth (UNH).
At the end of the month, the portfolio held a total of four covered calls2 and approximately 16.2% of the portfolio was covered.
The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. For most recent month-end performance, visit DIVOETF.com.
YIELD
| Distribution Frequency: Monthly |
Distribution Rate: 4.78% |
30-Day SEC Yield: 1.79% |
Distribution Rate is the normalized current distribution (annualized) over NAV per share. Distributions have been classified as a return of capital and may be comprised of option premiums, dividends, capital gains, and interest payments. As of the most recent distribution, 60% was estimated to be return of capital. See Form 19(a)-1. There is no guarantee the ETF will pay a distribution. 30-Day SEC Yield is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons among bond funds. It is based on the most recent month end. This figure reflects the income earned from dividends – excluding option income – during the period after deducting the Fund’s expenses for the period.
PERFORMANCE
Fund inception date: 12/14/2016. DIVO’s gross expense ratio is 0.56%. The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Short-term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. For performance data current to the most recent month-end please visit AmplifyETFs.com/DIVO. Brokerage commissions will reduce returns. A fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The closing price or market price is the most recent price at which the fund was traded.
SECTORS
| Sector | % Weight |
TOP 10 HOLDINGS
| Ticker | Name | % Weight |
All data as of 2/28/2025. Subject to change at any time. Fund holdings should not be considered recommendations to buy or sell any security. View Current Complete Holdings.
Index Definitions: All indexes are unmanaged and it’s not possible to invest directly in an index. S&P 500 Total Return Index—market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value, and assumes distributions are reinvested back into the index. It does not include fees or expenses. CBOE S&P 500 BuyWrite Index (BXM)—tracks the performance of a hypothetical buy-write strategy on the S&P 500 Index. A “buy-write” strategy is generally one in which an investor buys a stock (or basket of stocks), and also writes covered calls that correspond to those holdings. CBOE Volatility Index (VIX) is a measure of implied volatility, based on the prices of a basket of S&P 500 Index options with 30 days to expiration. DIVO differs substantially from the S&P 500 Index and CBOE S&P 500 BuyWrite index, which are used for comparison purposes as widely recognized measures of U.S. stock market performance. While the returns of DIVO have exhibited positive (but varying) correlation to the indexes over time, DIVO may invest in different stocks and in different proportions than in the S&P 500 index and CBOE S&P 500 BuyWrite index.
1All percentages shown indicate total return of the sector for the month. 2A covered call refers to a financial transaction in which the investor selling call options owns an equivalent amount of the underlying security.