DIVO Covered-Call Income Calculator

What DIVO is, and who it fits

DIVO, the Amplify CWP Enhanced Dividend Income ETF, is a different animal from the index-overwrite income funds it gets grouped with. Instead of holding a whole index and selling calls on it, DIVO holds a concentrated basket of roughly two dozen individual blue-chip dividend stocks and then writes covered calls tactically — on selected positions, only when the manager judges option pricing attractive — rather than blanketing the entire portfolio every month. Sub-advised by Capital Wealth Planning and launched in 2016, it targets a monthly distribution of about 4.8% a year: a base layer of ordinary dividends from the underlying companies, topped up by an option-premium "special" distribution. That is a far cry from the ~12–14% headline of a fund like SPYI or QQQI, and the gap is the point — DIVO deliberately keeps more of its equity upside instead of selling almost all of it for cash today.

That design tells you who it fits. DIVO suits an investor who wants a moderate income boost on top of real equity ownership — someone who likes the idea of quality dividend stocks but wants a little more current cash flow, and is willing to give up a slice of upside to get it. It fits less well if you are chasing the biggest possible headline yield, because tactical, partial overwriting simply throws off less premium than selling calls on the whole book. It also fits less well than a pure dividend-growth fund like SCHD if your goal is an income stream that rises every year on its own, because DIVO's premium layer does not reliably grow. This calculator models per-share distribution growth at zero so the projection never extrapolates that premium forward as if it compounded like a rising dividend.

The trade-off this calculator makes visible

Because DIVO overwrites only part of its portfolio, its NAV has historically held up better than fuller-overwrite funds — but "better" is not "immune." Every call the fund sells still caps the upside on that position, and part of each distribution is classified as return of capital, roughly 30% in our model, which means some of what lands in your account is your own principal handed back rather than newly earned income. Reinvesting return of capital is not free growth. The low / base / high scenario band exists precisely because option premium rises and falls with volatility and the underlying stock basket is concentrated. Toggle between Income and Value to watch both sides of the trade: the more you lean on the payout, the more the capped upside shows up as slightly flatter long-run principal — milder here than with an index-overwrite fund, but present.

Tax and account placement to keep in mind

DIVO's tax picture is genuinely mixed. Dividends from its underlying stocks can qualify for the favorable long-term rates, its index and single-stock options are largely treated as Section 1256 contracts taxed 60% long-term / 40% short-term, and the return-of-capital portion defers tax while lowering your cost basis until you sell. That blend can make DIVO relatively tax-efficient in a taxable account — but return of capital is a deferral, not a gift: a lower basis means a larger eventual capital gain. The Account toggle above models this, and a Traditional IRA or Roth still compounds the distribution fully untaxed, so switch it to compare. This is general information, not tax advice; confirm your own situation with a qualified professional. All figures here are illustrative and dated as of 2026-06.

Compare with the higher-yield, full-overwrite income funds — JEPI, SPYI and QQQI sell far more of their upside for a bigger headline — or with a pure dividend-growth alternative in SCHD. To pressure-test living on the payout, use Live off dividends; to see after-tax DRIP with a distribution-cut stress overlay, use the Dividend snowball.