DIVO Basics Sponsor: Amplify ETFs Underlying Index: S&P 500 High Dividend Index Dividend Yield: 4.81% Expense Ratio: 0.55% Total Returns CAGR Inception: 14.99%
DIVO Overview DIVO is an actively managed dividend ETF. DIVO invests in a basket of 20-25 high-quality large-cap companies from all relevant industry sectors. DIVO invests in a comparatively small number of holdings. Most equity index funds invest in hundreds, even thousands, of stocks. Most actively managed funds aim for hundreds of stocks. Funds with two dozen holdings are rare, and much less diversified than average. DIVO's concentrated, undiversified holdings are the fund's most significant drawback. As mentioned previously, the fund is an innapropiate choice for investors looking for diversification. Position sizes should be kept small too, in my opinion at least.
Securities and security weights are selected based on assorted quantitative measures, including quality, growth, and size factors. DIVO focuses on high-quality large-cap companies, which reduces risk and volatility. This is a benefit for the fund and its shareholders, and particularly important for income investors and retirees.
FD: I'm not a great believer in high div investing, but others do.