COMMENTARY
The end of June also wraps up the first half of 2024 and was certainly full of surprises, not unlike a typical year. Investor sentiment shifted from wondering if the rally was sustainable to wondering how high the market could go. In fact, the S&P 500 averaged a new all-time high approximately every four days through the first half of the year. Looking forward, the second half of the year will likely continue to have surprises with an election, potentially the first (or second) rate cut by the Fed and seasonal market forces that should keep investors engaged and likely be full of surprises.
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OVERALL MORNINGSTAR™ RATING |
During June, the Amplify CWP Enhanced Dividend Income ETF (DIVO) returned 0.95% while the benchmark, the S&P 500 TR Index, returned 3.59% and the CBOE S&P 500 BuyWrite Index returned 1.77%. The Information Technology sector (+6.67%) was the biggest contributor to returns followed by Consumer Discretionary (+2.91%) and Health Care (+1.73%).1 Financials (-1.76%) contributed the least to the return during the period followed by Materials (-7.83%). Positions that contributed most significantly included Apple (AAPL), Microsoft (MSFT) and TJX Companies (TJX). Positions that detracted most from returns in June included Freeport-McMoRan (FCX) and Visa (V).
No new positions were added to the Fund during the month, but several existing positions were added to. Freeport McMoRan (FCX), Honeywell (HON) and Verizon (VZ) were added to during June. The Fund’s position in Cisco (CSCO) was trimmed as it has underperformed against the broader Technology sector, despite being reasonably priced with good free cash flow and an attractive yield.
From an options standpoint, it was a busy month with new calls sold during the month on Apple (AAPL), Amgen (AMGN), Cisco (CSCO), Duke Energy (DUK), Freeport McMoRan (FCX), Goldman Sachs (GS), JPMorgan Chase (JPM), Merck (MRK), Microsoft (MSFT), Procter & Gamble (PG), and TJX Companies (TJX).
The portfolio held a total of ten covered calls2 at the end of June 2024: Apple (AAPL), Amgen (AMGN), Cisco (CSCO), Freeport McMoRan (FCX), Goldman Sachs (GS), JPMorgan Chase (JPM), Merck (MRK), Microsoft (MSFT), Procter & Gamble (PG), and TJX Companies (TJX).
At the end of the month, approximately 15.3% of the portfolio was covered.
Distribution Rate is computed as the normalized current distribution (annualized) over NAV per share. In addition to net interest income, distributions may include capital gains and return of capital (ROC). Please click here for more information. 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.
Fund inception date: 12/14/2026. 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 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.
All data as of 6/30/2024. 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 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.
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.