ETF Education Report: AMPLIFY CWP ENHANCED DIVIDEND INCOME ETF (DIVO)

What this ETF is trying to do

The AMPLIFY CWP ENHANCED DIVIDEND INCOME ETF, known by its ticker symbol DIVO, is an exchange-traded fund (ETF) listed on the NYSE. Based on its name and holdings, it focuses on providing dividend income. It holds a variety of different companies across various industries.

What the numbers show

When looking at how an ETF performs, it is important to understand two different types of returns: price return and total return.

• Price Return: This measures only the change in the share price. For DIVO, the year-to-date (YTD) price return is approximately 6.27%. Over the last year, the one-year price return was about 6.65%.

• Total Return: This is a more complete picture because it includes both the share price changes and the money paid out to investors through distributions. For DIVO, the YTD total return is approximately 9.73%, and the one-year total return was about 13.91%.

Looking further back, the three-year price return was approximately 34.31%, while the three-year total return was much higher at approximately 57.96%. The current price of the ETF is $47.29. An estimated price from roughly one year ago was approximately $44.34.

Income and distribution explanation

This ETF provides cash to investors through distributions. The distribution yield is approximately 6.35%. This number describes the cash payments relative to the ETF's price. It is important to remember that a high yield is not the same thing as total return.

DIVO usually pays out money monthly, having made 12 payments over the last year. Most of these payments have been made on Thursdays.

Top Holdings

The following are the top holdings in this ETF (note that this is a partial list and holdings can change over time):

• Microsoft Corp (6.03%)

• Apple Inc (5.43%)

• Caterpillar Inc (5.34%)

• Invesco Shrt-Trm Inv Gov&Agcy Instl (5.14%)

• Visa Inc Class A (5.06%)

• Amgen Inc (5.05%)

• The Goldman Sachs Group Inc (4.80%)

• JPMorgan Chase & Co (4.77%)

• State Street® CNSMRDISCSELSECTSPDR®ETF (4.59%)

• Chevron Corp (4.42%)

NAV erosion explanation

"NAV erosion" refers to a situation where the value of the underlying assets in the fund decreases significantly. StockValueFinder uses an erosion-risk score to measure this risk. For DIVO, the erosion score is 100, which is labeled as "No price erosion detected." There is no severe erosion-risk flag for this ETF.

Pros

• The ETF has shown positive price returns and total returns over the last year and three years.

• It provides regular monthly distributions.

Cons

• Investors should remember that high distribution yields do not guarantee the preservation of your original investment (principal).

Beginner takeaway

When studying DIVO, it is helpful to look at both the share price and the total return. While the share price tells you how much the "sticker price" of the ETF changed, the total return shows you how much you actually gained when including the cash distributions paid out to you.