COMMENTARY
Risk assets, like the equity and fixed income markets, dislike uncertainty as it introduces greater variability to the inputs for valuations, corporate guidance and interest rate outlooks. With the changing administration in the White House and an FOMC that has left the door open to many possibilities in 2025, it’s clear why markets started the year on the back foot. Presidential tweets that threaten tariffs – a hallmark of Trumps first term – only added to the uncertainty for investors. By mid-January the S&P 500 was struggling to stay positive and the VIX was flirting with elevated levels near 20. Eventually the appetite for risk returned and the S&P 500 rallied back from mid-month losses to finish the month higher. The VIX headed lower, and investors turned their attention to Q4 corporate earnings along with many companies providing their first glimpse into guidance for 2025.
|
OVERALL MORNINGSTAR™ RATING |
During January, the Amplify CWP Enhanced Dividend Income ETF (DIVO) returned 4.87% while the benchmark, the S&P 500 Index, returned 2.78% and the CBOE S&P 500 BuyWrite Index (BXM) returned 2.20%. The Information Technology sector (+0.69%) was the biggest contributor to returns followed by Financials (+2.07%) and Health Care (+0.85%).1 Materials (-0.11%) contributed the least to the return followed by Communication Services (+0.66%). Positions that contributed most significantly included IBM (IBM), Goldman Sachs (GS) and Apple (AAPL) while Freeport-McMoRan (FCX) and Honeywell (HON) were among the biggest detractors. Last month shares of UnitedHealth weighed heavily on the Health Care sector as well as the returns in DIVO. The situation continues to be closely monitored and shares of UnitedHealth, while not back to the highs of early December, rebounded and were a significant contributor to the strong performance of DIVO in January.
During the month Agnico Eagle Mines (AEM) was added back to the portfolio. AEM is a high-quality gold mining company that was in DIVO until April 2024, when it was called away after the price ran up. However, the pullback in early January created an attractive entry point to add AEM back into the Fund. The Fund’s positions in American Express (AXP) and Apple (AAPL) were also added to while Merck (MRK) was trimmed. 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), Caterpillar (CAT), Freeport-McMoRan (FCX), JPMorgan (JPM), Microsoft (MSFT), Merck (MRK), TJX Companies (TJX) and Visa (V).
At the end of the month, the portfolio held a total of eight covered calls2 and approximately 26.3% 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: 4.81% |
30-Day SEC Yield: 1.75% |
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 |
| Financials | 24.90% |
| Industrials | 14.48% |
| Information technology | 14.05% |
| Health Care | 13.01% |
| Consumer Discretionary | 12.90% |
| Communication Services | 7.80% |
| Consumer Staples | 4.40% |
| Materials | 3.86% |
| Energy | 3.17% |
| Utilities | 2.24% |
TOP 10 HOLDINGS
| Ticker | Name | % Weight |
| UNH | UnitedHealth Group | 5.71% |
| CAT | Caterpillar | 5.15% |
| AMGN | Amgen | 5.09% |
| CME | CME Group | 5.03% |
| AXP | American Express | 5.01% |
| HD | Home Depot | 5.01% |
| MSFT | Microsoft | 5.01% |
| HON | Honeywell | 4.99% |
| V | Visa | 4.97% |
| IBM | International Business Machines | 4.62% |
All data as of 1/31/2025. 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.