If your portfolio only holds U.S. stocks, you are excluding around 40% of the global equity market by market capitalization. That means giving up exposure not only to developed international markets like Japan, the U.K., Canada, France, and Switzerland, but also to emerging markets such as China, India, Taiwan, Brazil, and South Korea.
A lot of younger investors have never lived through the lost decade from 1999 to 2009, when U.S. stocks delivered negative inflation-adjusted returns. A full decade is a long time to wait for a portfolio to recover in real terms. One of the easiest ways to reduce that regret is to diversify internationally.
If you are also an income investor, the good news is that there are more options than just plain-vanilla dividend ETFs. Some international income ETFs selectively use covered calls to enhance yield, and the better ones do it without crushing total return. One that stands out to me right now is the Amplify CWP International Enhanced Dividend Income ETF (NYSEMKT: IDVO).
What is IDVO?
IDVO is an actively managed ETF, both in terms of stock selection and option writing. On the equity side, this is not a fund that simply tracks an index like the MSCI ACWI ex-U.S. Index and calls it a day. Instead, the manager uses that benchmark as a starting point, then looks for high-quality, large-cap international companies.
From there, the manager allocates the portfolio by sector and country with the discretion to overweight or underweight areas they believe will outperform. The resulting portfolio usually holds around 30 to 50 securities and is screened for metrics like earnings, cash flow, return on equity, market cap, and management track record.
The second piece is the covered call strategy, and this is where IDVO separates itself from a lot of lower-quality income ETFs. Many covered call funds simply go long an index and mechanically sell at-the-money calls on all or most of the portfolio. That tends to generate income, but it also caps upside very aggressively.
IDVO does not work that way. It writes covered calls on individual stocks, which gives the manager more flexibility on strike prices, expirations, and coverage ratios. The stated goal is to generate roughly 3% to 4% from underlying dividend income and another 2% to 4% from call premium.
As of March 31, 2026, the annualized distribution yield, calculated from the most recent monthly payout divided by net asset value, stood at 6.13%, but keep in mind that this can fluctuate.
How has IDVO performed?
What is surprising about IDVO is that it is one of the few covered call ETFs that has actually outperformed its non-covered-call benchmark. Over the trailing three-year period ending March 31, with distributions reinvested, IDVO returned 21.35% annualized. Over that same stretch, the MSCI ACWI ex-U.S. Index returned 14.49%.
That is not supposed to happen often with covered call strategies. Normally, the upside you give away through options eats into long-term returns. In this case, though, the manager’s stock selection has clearly added a meaningful amount of alpha.
If you look at the portfolio, one major difference is country weighting. Canadian stocks, for example, make up 21.85% of the fund, which is a huge overweight relative to the global ex-U.S. market, where Canada is only a small slice. That active positioning appears to have helped.
Of course, there is a trade-off. IDVO is not cheap. At a 0.65% expense ratio, it is far more expensive than a plain international index ETF. That is the price you pay for active stock selection plus tactical option writing. Normally I would be skeptical of that kind of fee, but so far, IDVO has earned it.
If you want monthly income, international diversification, and a manager that has actually shown an ability to add value beyond simply selling calls, I think IDVO is one of the better options out there right now.
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