If you’re one of those investors who like to take the path of least resistance and invest in only the S&P 500, you could be losing an opportunity to make money. When you plan to hold an investment for decades, you need to be very careful about what you invest in. Gone are the days when the S&P 500 generated steady returns. Amplify CWP Growth & Income ETF, Avantis International Small Cap Value ETF (NYSEARCA:AVDV | AVDV Price Prediction) and Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO) are ETFs worth considering today.
Investing in exchange-traded funds (ETFs) can be a smart move. It will diversify your portfolio and generate passive income when you need it. These are ETFs with a significantly higher yield that can boost your total returns. They often outperform the broader market and generate regular dividend income.
Amplify CWP Growth & Income ETF
Amplify CWP Growth & Income ETF is a fund that aims to provide capital appreciation and steady income. It is a fairly new fund launched in 2024 and invests in large-cap stocks.
It holds 55 U.S. growth-focused stocks and sells short-term covered-call options on the holdings to turn a part of the upside into immediate cash. This allows the ETF to offer capital appreciation on growth stocks while ensuring a high monthly dividend. Its dividends come from options premiums and the distribution announced by the companies.
The fund manager will only write calls if the price momentum looks favorable. If the options premiums continue to stay rich, the ETF could deliver an equity-like upside with a high yield. Even if the tech stalls, the call premiums can provide a steady pay check. It pays monthly dividends and has recently announced a dividend of $0.193.
QDVO has the highest allocation in the technology sector (41.07%), followed by communication services (20.92%) and consumer discretionary (15.90%). Its top 10 holdings include Nvidia, Apple, Alphabet, Amazon, Microsoft, Tesla, and Broadcom.
The ETF has a yield of 12.02% and an expense ratio of 0.55%, which means you pay $55 for every $10,000 you invest. Over the past year, QDVO has generated a total return of 26.19%.
Avantis International Small Cap Value ETF
An actively managed ETF, the Avantis International Small Cap Value ETF invests in small-cap stocks in the developed markets outside of the U.S. This fund provides exposure to global stocks using a rules-based methodology to find the most undervalued stocks with strong fundamentals. It invests in companies that are expected to see higher returns and are trading at low valuations with a high profitability ratio.
It invests in value stocks and offers the perfect combination of value and quality. The fund lays strong emphasis on profitable companies to build a globally diversified portfolio. There are not many small-cap ETFs worth considering, and this is where AVDV stands out.
AVDV holds 1,449 stocks, which reduces the weightage on individual stocks. No stock has a weightage over 1%, and the biggest sector allocation is in industrials (22%), followed by materials (17.43%). The ETF has generated a total return of 40.71% in a year and 26.24% in 3 years.
The ETF has a yield of 3.29% and an expense ratio of 0.36%. It is up 35.7% year-to-date and can outperform the broader market in the coming years. AVDV is advantageous for the international exposure and allows you to own some of the best small-cap stocks at a low cost.
Amplify CWP Enhanced Dividend Income ETF
A favorite of dividend investors, Amplify CWP Enhanced Dividend Income ETF is an actively managed fund that holds a basket of large-cap U.S. companies that have a history of growing dividends and strong earnings.
The ETF has a small holding of about 30 stocks that have long-term growth potential. Once the portfolio is ready, the management sells covered calls to generate extra annual income from options premiums while leaving most of the upside on the table so the fund can also participate in the stock market run.
The fund has 28 stocks and pays monthly dividends. It has the highest allocation in the financial sector (28.79%), followed by information technology (16.88%) and industrials (16.54%). Its top 10 holdings include tech giants such as RTX Corporation, Visa, Microsoft, Apple, and American Express.
DIVO invests in the top blue-chip companies and could continue churning out 4-5% cash stream for investors. It is an ideal fund for retirees who seek steady income with low risk. The fund has a dividend yield of 4.78% and an expense ratio of 0.56%.
DIVO has generated an annualized return of 17.14% in 3 years and 13.37% in 5 years. It offers an ideal mix of income and growth by holdings the top-quality U.S. businesses.
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