As a general rule of thumb, covered call ETFs tend to underperform their long-only counterparts. The tax drag from frequent distributions, the higher fees, and the simple reality that your upside is capped while you retain most of the downside exposure all work against the math. For investors who genuinely need income, selling shares periodically and benefiting from more favorable long-term capital gains treatment is usually the cleaner path.
Still, there are exceptions. One that has earned a place on this radar recently is the Amplify CWP International Enhanced Dividend Income ETF (NYSEARCA:IDVO).
Over the 3.75-year period from Sept. 8, 2022, through June 8, 2026, IDVO delivered a 21.54% annualized total return, outpacing the Vanguard Total International Stock ETF (NYSEARCA:VXUS), which returned 18.22% annualized over the same window.
IDVO is not a typical covered call ETF. It is also one that many investors overlook, because its headline yield looks modest against flashier competitors. Yet its total return profile has been quietly remarkable. Here is what you need to know.
What Is IDVO?
IDVO is an actively managed ETF overseen by three sub-advisers: Capital Wealth Planning (CWP), Seymour Asset Management, and Penserra Capital Management. At its core, it is an actively managed international equity portfolio drawing its universe from the MSCI ACWI ex-U.S. Index. The managers focus on high-quality large-cap companies with the potential to consistently grow their dividends over time, and the fund primarily gains exposure through American Depositary Receipts (ADRs).
Portfolio managers do make tactical decisions on country and sector allocations, but stock selection is the primary driver of returns. Unlike VXUS, which holds nearly 8,800 individual stocks spread across developed and emerging markets, IDVO concentrates into roughly 30 to 50 holdings. Selection criteria include earnings growth, cash flow generation, return on equity, market capitalization, and management quality.
On top of the stock portfolio sits a covered call overlay. Management targets approximately 3% to 4% of annual yield from dividends and another 2% to 4% from option premiums. Crucially, IDVO does not use the blunt approach common among income-focused ETFs, such as selling index calls or mechanically writing at-the-money options across the whole portfolio. Instead, the managers write options on individual stocks. That precision lets them target elevated implied volatility around earnings announcements and other corporate events, preserving more upside participation in the process. It is one key reason this strategy has held up better than many traditional covered call funds over its short history.
IDVO is part of Amplify’s YieldSmart suite, which also includes the domestically focused Amplify CWP Enhanced Dividend Income ETF (DIVO) and the Amplify CWP Growth and Income ETF (QDVO). In February 2026, Amplify announced that IDVO had surpassed $1 billion in assets under management, a milestone that reflects growing investor appetite for international income strategies with a disciplined equity backbone. As of mid-July 2026, the fund’s assets stood near $1.3 billion.
Yield and Total Return
This is the section where many investors dismiss IDVO too quickly. As of May 31, 2026, the ETF carried an annualized distribution yield of approximately 6%, calculated by annualizing the most recent monthly distribution and dividing by net asset value. As of early July 2026, the forward yield was tracking near 5.9%, reflecting the fund’s recent price appreciation.
There are certainly covered call ETFs offering significantly higher yields than 6%. The trade-off is that many of those funds sacrifice total return to maximize current income. IDVO has largely avoided that dynamic. A yield in the 6% range already clears the traditional 4% withdrawal guideline cited by many retirement planning frameworks. More importantly, the strategy has delivered meaningful capital growth alongside that income stream.
Morningstar currently assigns IDVO a five-star overall rating, placing it among the top performers on a risk-adjusted basis within the Derivative Income category, which comprised 85 funds as of June 30, 2026. The performance record supports that ranking. Over the trailing one-year period, IDVO returned 35.47%. Over the trailing three-year period, it gained 25.05%.
Returning to the comparison from the introduction: a $10,000 investment made at the start of the test period would have grown to approximately $20,774 before taxes in IDVO, versus roughly $18,724 in VXUS. That is a cumulative return of about 107.75% against 87.25%. What makes that gap particularly notable is that IDVO achieved it while charging a 0.65% expense ratio, compared with just 0.05% for VXUS. The fee headwind is real, and the active strategy has more than offset it.
The takeaway here is straightforward: covered call ETFs should not be evaluated on yield alone. A thoughtfully constructed strategy that preserves upside participation, like IDVO’s selective options overlay and concentrated high-quality portfolio, can generate stronger long-term outcomes than a higher-yielding but more mechanically capped alternative.
Editor’s note: This article has been updated to reflect that IDVO is rated among 85 funds in the Morningstar Derivative Income category as of June 30, 2026, that the fund surpassed $1 billion in assets under management in February 2026 with assets now near $1.3 billion, and that Penserra Capital Management serves as a third sub-adviser alongside Capital Wealth Planning and Seymour Asset Management. The fund’s forward yield was also updated to approximately 5.9% as of early July 2026.
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