Amplify’s IDVO fund faces potential yield erosion from USD strength, with 77% of recent payouts classified as return of capital.
Amplify CWP International Enhanced Dividend Income ETF (IDVO) offers a 6.2% distribution yield, but its SEC yield stands at just 1.5%. The discrepancy stems from 77% of recent distributions being return of capital rather than earned income, raising sustainability concerns.
The fund’s unhedged structure exposes investors to currency risk, where a 5% USD rally against foreign currencies could erase an entire year’s income. Historical volatility, such as a 5% USD/EUR swing in a single quarter of 2026, highlights this vulnerability. Hedged alternatives like HEFA or DBEF mitigate this risk for a small fee.
IDVO holds international ADRs, including Taiwan Semiconductor (TSM) and ASML Holding (ASML), and employs covered calls on a portion of its holdings. The fund has gained 13% year-to-date and 35% over the trailing year.