This fund may be an attractive move for investors in volatile, inflationary markets, amplify etfs ceo says
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Investors may want to consider a special fund focused on high dividend yielding large-caps, according to a leading ETF fund manager. Christian Magoon believes his firm's actively
managed Amplify CWP Enhanced Dividend Income ETF (DIVO) will provide upside to investors during this volatile and inflationary market backdrop. It's described as an enhanced dividend
income ETF made up of blue-chip dividend payers including Chevron, UnitedHealth, McDonald's and Visa. "Those kinds of high quality names… have a built-in hedge, and that hedge is
growing their earnings," the Amplify ETFs CEO told CNBC's "ETF Edge" Monday. "If we get into a crash scenario, having blue chip companies that are profitable and
[have] strong balance sheets, we think will be helpful." The Morningstar-rated five star ETF has a dividend income of about 5%, Magoon said. DIVO has been outperforming the S&P 500
so far this year. But it's still off almost 14% year-to-date, based on Thursday's market close. The S&P is off 23%. Meanwhile, over the past five years, DIVO has underperformed
the index. And, one ETF expert believes DIVO will face pressure along with the rest of the broader market. "It's kept up with the S&P 500 with much lower volatility over the
past five years, and I think that really kind of lends that idea of a tactical overlay versus a pure passive writing calls on a broad index," said ETF Action CEO Mike Akins. "Over
time, that type of strategy is going to lose ground significantly to the marketplace because we're in more up-markets than we are down." Akins, who runs a data and analytics
research platform, notes alternative strategies such as managed futures are faring well in the volatile market. While many ETFs in the futures space are also holding up nicely, he warns they
are typically nearly impossible to time. "The problem is, is so many of these strategies are used tactically, and as we know, trying to time when these strategies are going to add
benefit to your portfolio is extremely difficult," Akins said. Disclaimer