Amplify lowers fees on YieldShares CWP Dividend & Option Income ETF

Oct 23rd, 2018 | By | Category: ETF and Index News

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Amplify ETFs has lowered the expense ratio for the Amplify YieldShares CWP Dividend & Option Income ETF (DIVO US) from 0.96% to 0.49%, effective 22 October 2018.

Amplify lowers fees on YieldShares CWP Dividend & Option Income ETF

The fund seeks to provide high monthly income through dividend-paying stocks and option premiums.

The lower expense ratio reflects Amplify contractually agreeing to reduce the management fee on the fund for one year. It is unclear whether the expense ratio will remain lowered after this time.

DIVO was launched in December 2016 on Bats Exchange (now Cboe BZX).

The fund, which is actively managed by Capital Wealth Planning, targets an annual income rate of 4 – 7% through a high-income US equities portfolio and options strategy overlay.

It combines 20 to 25 dividend-paying stocks from the S&P 500 Index with an opportunistic covered call writing program.

A covered call is an income-producing strategy where an investor sells call options against shares of stock already owned.

The investor collects the option premium as income but is exposed to losses on the contract if the underlying stock’s price rises above the call option’s strike price.

DIVO has approximately $16 million in assets under management. It is one of three YieldShares-branded ETFs – a subset of Amplify ETFs’ line-up that focuses on income solutions – although the Amplify YieldShares Senior Loan and Income ETF is currently in the final stages of liquidation.

The other ETF in the suite is the YieldShares High Income ETF (YYY US) which houses around $200m in AUM. The fund tracks the ISE High Income Index, composed of 30 closed-end funds (CEFs) ranked highest overall by International Securities Exchange (ISE) according to three criteria: fund yield, discount to net asset value, and liquidity. The ETF comes with a punchy expense ratio of 2.02% due to acquired fund fees of 1.52%.

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