COMMENTARY
The old adage of “sell in May and go away” need not apply this year as May produced returns in the S&P 500 of nearly 5%, more than offsetting the loss from April. Moreover, in contrast to April where only one sector produced positive returns, May had only one sector (Energy) with negative performance. As has been the trend in 2024, May set the new all-time high for major equity benchmark indices. While overall volumes in exchange-traded securities were lower than in prior months, investors have shown remarkable patience in continuing to hold equity securities while geopolitics and the Fed compete for headlines
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OVERALL MORNINGSTAR™ RATING |
During May, the Amplify CWP Enhanced Dividend Income ETF (DIVO) returned 2.60% while the benchmark, the S&P 500 TR Index, returned 4.96% and the CBOE S&P 500 BuyWrite Index returned 1.09%. The Information Technology sector (+6.49%) was the biggest contributor to returns followed by Financials (+3.44%) and Consumer Staples (+5.45%).1 The Energy sector (-1.89%) contributed the least to the return during the period, followed by Consumer Discretionary (+0.71%). Positions that contributed most significantly included Apple (AAPL), Walmart (WMT) and Goldman Sachs (GS). Positions that detracted most from returns in May included McDonalds (MCD) and Conoco Phillips (COP).
There were no new positions added in the Fund during the month, but several existing positions were added to. Freeport McMoRan (FCX), Honeywell (HON), JPMorgan (JPM), Merck (MRK) and TJX Companies, which was a new position in April, were added to during May. The position in Broadcom (AVGO) was closed but has been a strong contributor to performance since it was added earlier this year. With their sales growth rate slowing and margins beginning to flatten, a lot needs to go right for shares to justify the current multiples. The Fund’s position in McDonalds (MCD) was trimmed after underperforming as recent price increases across the menu have slowed store traffic.
From an options standpoint new calls during the month were sold on Apple (AAPL) and Cisco (CSCO). The Funds position in Walmart (WMT) was partially called away at the end of the month after performing well.
The portfolio held a total of three covered calls2 at the end of May 2024: Apple (AAPL), Amgen (AMGN) and Freeport McMoRan (FCX). At the end of the month, approximately 2.7% 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 4/30/2024. 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.