Wealthy PotDIVO vs SCHD: A 4.84% Payout Against a 3.32% Dividend Yield
DIVO advertises a 4.84% distribution rate and SCHD a 3.00% distribution yield, but the dividends inside DIVO yield only 1.35% against SCHD's 3.32%. The gap is option premium and, in some years, your own capital handed back to you. DIVO is an actively managed fund with about 30 holdings that writes covered calls on some of them and charges 0.56%. SCHD tracks a 100-stock dividend index and charges 0.06%. Over the five years to 31 August 2026 DIVO returned 11.35% a year against SCHD's 10.01%; over the last twelve months it returned 18.28% against 29.45%. Neither is the better fund in general. DIVO buys you a larger and less tax-efficient monthly cheque and a capped upside. SCHD buys you a cheaper, cleaner, qualified dividend and the full ride.
Table of Contents
The Short Answer
- The headline yields are measuring different things. DIVO's fund page shows a 4.84% distribution rate and a 1.35% 30-day SEC yield on the same day. Amplify's own footnote says the SEC yield "reflects the income earned from dividends" and excludes option income.
- SCHD's dividends yield more than DIVO's. 3.32% against 1.35%. DIVO's largest holdings include Microsoft, Apple, Nvidia and Visa. None of those four appears in SCHD's ten largest.
- Part of DIVO's monthly cheque has been your own money. In calendar 2023, $0.91 of DIVO's $1.71 per share was reported on Form 1099 as a nondividend distribution, that is, return of capital. In 2024 and 2025 it was zero. The monthly estimates currently say 69% for 2026 so far, and those estimates have been wrong before.
- Option premium is not a qualified dividend. In the fiscal year to 30 September 2025, 41.04% of DIVO's ordinary income distributions were qualified dividend income. For SCHD in its fiscal year to 31 August 2025 the figure was 100%.
- Writing calls caps the upside, and the issuer says so. DIVO's annual report names it as "a contributor to the underperformance over the Period" for the year to 30 September 2025.
- But the calls are tactical, not blanket. At 30 June 2026 DIVO had written calls on exactly two of its holdings, covering about 2.06% of net assets. Nine months earlier it was 11.55%.
- The fee gap is 0.50 percentage points. 0.56% against 0.06%, more than nine times over, deducted every year whatever happens.
- A bigger payout has not meant a bigger total return. To 31 August 2026 DIVO led over three and five years and trailed badly over one year and year to date.
Two Funds Built to Do Different Jobs
These two tickers turn up in the same conversation because both are sold as income. Structurally they have almost nothing in common.
SCHD is a rulebook. Its prospectus states the whole of it in one sentence: the fund's goal is "to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Dividend 100 Index." The index keeps 100 names, and the entry test is written down:
"All index eligible stocks must have sustained at least 10 consecutive years of dividend payments, have a minimum float-adjusted market capitalization of $500 million USD and meet minimum liquidity criteria. The index components are then selected by evaluating the highest dividend yielding stocks based on four fundamentals-based characteristics ... Stocks in the index are weighted based on a modified market capitalization approach."
The four characteristics, named in the same sentence of the prospectus, are cash flow to total debt, return on equity, dividend yield and the five-year dividend growth rate.
Schwab's own fund page labels the management style "Passive". Nobody at Schwab decides which dividend stock looks good this quarter.
DIVO is a person. Two people, in fact. Its prospectus opens by describing "an exchange-traded actively managed fund", and the strategy is a stock portfolio plus an option overlay:
"Under normal circumstances, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in dividend-paying U.S. exchange-traded equity securities ('Equity Securities') and will opportunistically utilize an 'option strategy' consisting of writing (selling) U.S. exchange-traded covered call option contracts on such Equity Securities."
The stock side is deliberately small. Capital Wealth Planning, the sub-adviser that picks the names, builds "a portfolio of approximately 20 to 25 of such Equity Securities", holds no more than 8% in any one and keeps any sector "less than 30%". The fund is classified as non-diversified under the 1940 Act. Schwab's index caps a stock at 4.0% and a sector at 25%.
The option side is where the extra cash comes from, and the prospectus puts a target on it:
"CWP seeks to lower risk and enhance total return by tactically selling short-term call option contracts on some, or all, of the Equity Securities in the Portfolio. Specifically, CWP seeks to provide gross income of approximately 2-3% from dividend income and 2-4% from option premium, plus the potential for capital appreciation."
Note what that sentence is. It is a target, not a result. Neither the prospectus nor the shareholder reports break DIVO's actual distributions into dividend income and option premium, so this page reports the 2% to 4% as an intention and nothing more.
SCHD writes no options at all. The only derivatives its prospectus contemplates are futures used "primarily to seek returns on the fund's otherwise uninvested cash assets to help it better track the index."
The Distribution Rate Is Not the Dividend Yield
This is the single most misread number in covered-call funds, and Amplify prints both versions of it side by side on the same page, on the same date.
| As published by the issuer | DIVO | SCHD |
|---|---|---|
| Headline payout | Distribution Rate 4.84% (31 Aug 2026) | Distribution Yield TTM 3.00% (31 Aug 2026) |
| 30-day SEC yield | 1.35% (31 Aug 2026) | 3.32% (25 Sep 2026) |
| Payout above or below the SEC yield | 3.49 points above | 0.32 points below |
| Frequency | Monthly | Quarterly |
Amplify defines each term itself. The 30-day SEC yield, verbatim from its own tooltip:
"30-Day SEC Yield is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons among bond funds. It is based on the most recent month end. This figure reflects the income earned from dividends – excluding option income – during the period after deducting the Fund's expenses for the period."
And the distribution rate, also verbatim:
"Distribution Rate is the normalized current distribution (annualized) over NAV per share. Distributions may include return of capital (ROC). Click on 'All Distributions' to view Form 19a-1."
Read those together and the comparison writes itself. The dividends DIVO collects from its stocks yield 1.35%. The dividends SCHD collects yield 3.32%, roughly two and a half times as much. DIVO pays out 4.84% anyway, and the difference is option premium plus, when income falls short, capital.
That is not a criticism of DIVO. It is what an enhanced income fund is for. But anyone who compares 4.84% with 3.00% and concludes DIVO is the higher-yielding dividend fund has compared two different measurements.
Why is DIVO's dividend yield so low? Look at what it owns. Its ten largest positions on 29 September 2026 were Microsoft, Caterpillar, Apple, Amgen, Visa, JPMorgan Chase, Goldman Sachs, Chevron, the Consumer Discretionary Select Sector SPDR and Nvidia. SCHD's were Qualcomm, Texas Instruments, Procter and Gamble, Coca-Cola, Merck, Chevron, UnitedHealth, Amgen, Verizon and ConocoPhillips. One list is built around quality and growth. The other is built around yield.
What Is Actually Inside DIVO's Payout
Amplify publishes a Form 19(a)-1 notice every month telling shareholders where that month's cash is estimated to have come from. Here is what those notices have said.
| Notice | Paid per share | Estimated return of capital, that month | Calendar year to date, estimated return of capital |
|---|---|---|---|
| 31 December 2025 | $0.9534 | 94% | 78% of the full year |
| 31 March 2026 | $0.1787 | 44% | 65% |
| 30 June 2026 | $0.1828 | 69% | 67% |
| 31 August 2026 | $0.1947 | 58% | 69% |
| 30 September 2026 | $0.1890 | 68% | 69% |
Return of capital is not income. It is a slice of your own investment sent back to you. It is not taxed when you receive it, but it reduces your cost basis, so it enlarges the capital gain you will eventually declare. DIVO's prospectus explains the mechanism plainly:
"In addition, the Fund may make distributions that represent a return of capital for tax purposes and thus will generally not be currently taxable to you; however, such distributions may reduce your tax basis in your Shares, which could result in you having to pay higher taxes in the future when Shares are sold, even if you sell the Shares at a loss from your original investment."
And it explains why a fund that pays level monthly amounts tends to produce it:
"To distribute more consistent levels of dividends, the Fund intends to estimate annual income for the year and pay such amount in approximately even monthly installments. In doing so, some portion of the distribution may be considered a return of capital for tax purposes."
Now the part almost nobody checks, and the reason this section exists. Those monthly percentages are book-basis estimates. Every notice says so in its own words:
"The amounts and sources of distributions reported in this notice are estimates on a book basis, are not being provided for tax reporting purposes and may later be determined to be from taxable net investment income, short-term gains, long-term gains (to the extent permitted by law), and return of capital. ... As a result, shareholders should not use the information provided in this notice for tax reporting purposes."
What ended up on the actual Form 1099 is a different story, and Amplify publishes that too.
| Calendar year, per share | Total distributions | Ordinary dividends (Box 1a) | of which qualified (Box 1b) | Capital gain distributions (Box 2a) | Nondividend, i.e. return of capital (Box 3) |
|---|---|---|---|---|---|
| 2023 | $1.7085 | $0.7983 | $0.6665 | $0 | $0.9102 (53.3%) |
| 2024 | $1.9013 | $1.7326 | $0.8069 | $0.1687 | $0 |
| 2025 | $2.8660 | $2.1619 | $0.7448 | $0.7041 | $0 |
So the honest position is this. DIVO's distributions have included a great deal of return of capital historically, and none at all in the last two completed tax years. The 2025 monthly notices estimated 78% return of capital for the year; the 1099 reported zero. The audited annual reports agree: for the fiscal years ended 30 September 2024 and 30 September 2025 the tax composition of distributions paid was $125,839,017 and $143,284,642 of ordinary income, $14,745,670 and $62,451,313 of capital gains, and no return of capital in either year. For the fiscal year ended 31 October 2023 it was $60,061,554 of ordinary income and $72,626,691 of return of capital.
We are not going to tell you what calendar 2026 will look like. The notices currently estimate 69% return of capital, the notices themselves say that figure may change, and the last two years it changed all the way to zero. Amplify's 2026 year-end tax report is the document that will settle it, and it does not exist yet. Anyone who tells you today that DIVO is paying you back your own money in 2026 is quoting an estimate as if it were a fact, and anyone who tells you it definitely is not is doing the same thing in the other direction.
SCHD's side of this is short. Schwab's audited annual report for the fiscal year ended 31 August 2025 shows a tax composition table with a single column, ordinary income, and no capital gain or return of capital column for these funds at all. SCHD's figure was $2,469,946,295.
The Same Dollar, Taxed Differently
Qualified dividends are taxed at long-term capital gains rates. Ordinary income is taxed at your marginal rate. Option premium is generally not a qualified dividend, and DIVO's prospectus says so three separate times in its tax section:
"The presence of covered call options in the portfolio may reduce the amount of dividends that are eligible for capital gains rates."
"The presence of covered call options in the portfolio may reduce the amount of dividends that would otherwise be treated as capital gain dividends."
That is not theoretical. Both issuers report the percentage in their annual reports.
| Fiscal year | Share of ordinary income distributions that was qualified dividend income |
|---|---|
| DIVO, year to 31 October 2023 | 98.82% |
| DIVO, period to 30 September 2024 | 46.46% |
| DIVO, year to 30 September 2025 | 41.04% |
| SCHD, year to 31 August 2025 | 100% |
DIVO's own qualified share has swung from 98.82% to 41.04% in two years, which is a useful warning in itself: the tax character of a covered-call fund's payout depends on what the manager realised that year, and you cannot plan around it the way you can with SCHD.
Here is what the difference is worth, roughly.
| Hypothetical, $100,000 in a taxable account | DIVO | SCHD |
|---|---|---|
| Annual distributions at the published rate | $4,840 | $3,000 |
| Taxed at ordinary rates | $2,393 (49.4%) | $0 |
| Taxed at qualified or long-term rates | $2,447 (50.6%) | $3,000 (100%) |
| Federal tax at 22% and 15% | $894 | $450 |
| Effective rate on the income | 18.5% | 15.0% |
| Cash left after federal tax | $3,946 | $2,550 |
The result is worth sitting with, because it cuts against the usual telling. DIVO's income is taxed less kindly per dollar, and it still hands you considerably more cash after tax at these yields. If you need spending money today, the tax argument alone does not send you to SCHD. What sends you to SCHD is the total return question in the next two sections.
One more wrinkle. In years when a slice of DIVO's payout is return of capital, that slice is not taxed at all in the year you get it, so the effective rate above would be lower and the deferred capital gain larger. Return of capital is a timing advantage, not a free lunch. Our guide to how dividends are taxed covers the underlying categories if any of this is new.
In an IRA or a 401(k) none of this section applies. Distributions are not taxed as they arrive, so the qualified percentage is irrelevant and the choice comes down to cost and total return.
What Writing Calls Costs You
A covered call is a trade. You take cash today and you sell away the gains above a strike price for the life of the option. DIVO's prospectus states the cost in its own risk disclosure:
"Covered call option strategy risk is the risk that the Fund will forgo, during the option contract's life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call, but has retained the risk of loss of the underlying security should the price of the underlying security decline. In addition, as the Fund sells (writes) covered call option contracts over more of its portfolio, its ability to benefit from capital appreciation becomes more limited."
Read the second half of the first sentence again. You give up the upside and you keep the downside. That is the deal, and it is why a covered-call fund tends to look good in flat and falling markets and to lag in strong ones.
Amplify does not hide it either. Its annual report for the year to 30 September 2025 attributes part of the shortfall directly:
"The Fund selectively sells covered calls on individual securities as part of the investment objective. When a security rises in price above the strike price of the sold call option, the upside to the Fund is limited. This was also a contributor to the underperformance over the Period."
In that same fiscal year DIVO's NAV total return was 13.56%, the S&P 500 returned 17.60% and the CBOE S&P 500 BuyWrite Index, an index of exactly this kind of strategy, returned 8.15%. DIVO sat between the two, which is what a partially covered portfolio should do.
That is the structural point, and it is the honest reason to think twice before treating DIVO as a drop-in replacement for an equity holding. A fund that has sold its upside will not compound like one that has not, in the years when there is upside to sell. If you want a broader treatment of the same trade-off in a different pair, see JEPI vs SCHD, which covers an index-level option overlay rather than a single-stock one.
How Much of DIVO Actually Has Calls on It
Here is where DIVO differs from most funds in its category, and it is a point in its favour. It does not blanket the portfolio. The prospectus is explicit:
"Unlike a systematic covered call program, CWP is not obligated to continuously cover each individual equity position. When one of the underlying stocks demonstrates strength or an increase in implied volatility, CWP identifies that opportunity and sells call option contracts tactically, rather than keeping all positions covered and limiting potential upside."
Funds have to file their full portfolios with the SEC on Form N-PORT every quarter, written options included, so this is checkable rather than a claim. We pulled four consecutive filings.
| Quarter end | Net assets | Written call positions in the whole fund | Market value of the shares under those calls, as a share of net assets |
|---|---|---|---|
| 30 September 2025 | $5.24bn | 12 | 11.55% |
| 31 December 2025 | $5.79bn | 3 | 1.97% |
| 31 March 2026 | $6.61bn | 6 | 1.72% |
| 30 June 2026 | $7.19bn | 2 | 2.06% |
At 30 June 2026 the entire option book was two lines: calls on 10,000 Caterpillar shares at a $1,000 strike, against a holding of 471,382 shares, and calls on 420,000 JPMorgan Chase shares at a $360 strike, against a holding of 1,068,358 shares. Both expired on 17 July 2026. So one position was 2.1% covered, one was 39.3% covered, and the other twenty-six stocks were not covered at all.
What that does and does not prove. It confirms the prospectus language: the overlay really is tactical, and DIVO is not a fund that has sold away the upside on everything it owns. It does not tell you what the average coverage is. These are four snapshots of short-dated options that are written and closed between reporting dates, and a fund can be heavily covered in the middle of a quarter and flat at the end of it. Nobody publishes a daily coverage series, so we are not going to estimate one. The range you can see, 1.7% to 11.6% at four consecutive quarter ends, is itself the finding.
DIVO vs SCHD Side by Side
| DIVO | SCHD | |
|---|---|---|
| Full name | Amplify CWP Enhanced Dividend Income ETF | Schwab U.S. Dividend Equity ETF |
| Management style | Actively managed | Index |
| Adviser | Amplify Investments LLC | Charles Schwab Investment Management, Inc. |
| Sub-advisers | Capital Wealth Planning, LLC and Penserra Capital Management LLC | None |
| Index tracked | None | Dow Jones U.S. Dividend 100 Index |
| Writes covered calls | Yes, tactically | No |
| Expense ratio | 0.56% | 0.06% |
| Prospectus cost example on $10,000 over 10 years | $689 | $77 |
| Inception | December 2016 | 20 October 2011 |
| Holdings | 30 | 102 |
| Ten largest positions | 49.75% of assets | 41.55% of assets |
| Diversification status | Non-diversified under the 1940 Act | Diversified |
| Net assets | $7.82bn | $109.10bn |
| Portfolio turnover | 94% (fiscal year to 30 Sep 2025) | 30% (prospectus, most recent fiscal year); 39.60% on the fund page |
| 30-day SEC yield | 1.35% | 3.32% |
| Headline payout | Distribution rate 4.84% | Distribution yield 3.00% trailing twelve months |
| Distributions | Monthly | Quarterly |
| Position cap | 8% per stock, under 30% per sector | 4.0% per stock, 25% per sector, set by the index |
| Exchange | NYSE Arca | NYSE Arca |
| CUSIP | 032108409 | 808524797 |
The sector split follows from the stock picking. Both issuers published weights as of 30 June 2026 on the same classification standard.
| Sector | DIVO | SCHD |
|---|---|---|
| Financials | 23.33% | 10.05% |
| Information Technology | 17.08% | 9.23% |
| Industrials | 16.55% | 11.55% |
| Consumer Discretionary | 11.37% | 7.74% |
| Consumer Staples | 8.35% | 20.38% |
| Health Care | 8.23% | 20.72% |
| Energy | 7.30% | 14.07% |
| Materials | 4.49% | not listed |
| Utilities | 2.21% | 0.11% |
| Communication Services | 1.09% | 6.15% |
Two funds sold as dividend income, and one holds twice as much technology and less than half as much in staples and health care. Owning both is not a diversified income sleeve, but it is less duplicative than most SCHD pairings. For a fund that actually overlaps SCHD name for name, see VYM vs SCHD.
What the Record Shows at One Date
Both issuers publish trailing returns as of 31 August 2026, which gives one clean head-to-head date. Everything below is net asset value, net of fees, annualised for periods over a year.
| To 31 Aug 2026 | DIVO | SCHD | DIVO minus SCHD |
|---|---|---|---|
| 1 month | 3.36% | 4.28% | −0.92 |
| 3 months | 5.69% | 8.24% | −2.55 |
| Year to date | 12.00% | 29.20% | −17.20 |
| 1 year | 18.28% | 29.45% | −11.17 |
| 3 years | 16.51% | 16.18% | +0.33 |
| 5 years | 11.35% | 10.01% | +1.34 |
| 10 years | no record | 13.17% | not comparable |
| Since own inception | 12.91% (from 13 Dec 2016) | 13.66% (from 20 Oct 2011) | different periods |
Three things in that table matter.
One: the higher payout has not produced the higher total return. Over the last twelve months DIVO paid roughly 4.8% and returned 18.28%; SCHD paid roughly 3.0% and returned 29.45%. Distribution rate and total return are separate numbers and the bigger one is not the one you spend, it is the one you keep.
Two: the ranking flips by period, and both funds have a case. DIVO led over three and five years. SCHD led by more than eleven points over one year. A page that shows you only one of those is selling something.
Three: 2026 so far has been a market that punishes a covered-call fund. SCHD's index returned 29.32% year to date to 31 August 2026. In a run like that, calls written at strikes below where the stock finished are exactly the position you do not want, and DIVO's own annual report already told you that is what happens. Read DIVO's 12.00% year to date as the strategy working as designed, not as the manager failing.
For the standardized after-tax figures the two issuers are not on the same date, and we will not paper over that. DIVO's prospectus reports five-year returns to 31 December 2025 of 12.07% before tax and 10.63% after taxes on distributions, a drag of 1.44 points a year. SCHD's prospectus reports five-year returns to 31 December 2024 of 11.03% before tax and 10.10% after, a drag of 0.93 points. Those are different five-year windows. They are usable as an indication that DIVO's income costs more in tax; they are not usable as a difference.
A Fee More Than Nine Times Larger
DIVO's fee table reads 0.55% management, 0.00% distribution, 0.01% acquired fund fees and 0.00% other, for a total of 0.56%. SCHD's reads 0.06% management and 0.00% other, for 0.06%. Both prospectuses publish the same standardized cost illustration, so this is like for like from the issuers themselves.
| Cost of a $10,000 investment | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| DIVO | $56 | $176 | $307 | $689 |
| SCHD | $6 | $19 | $34 | $77 |
| Difference | $50 | $157 | $273 | $612 |
Framed as a hurdle: DIVO has to beat SCHD's index by 0.50 percentage points a year just to draw level on cost. Over the five years to 31 August 2026 it cleared that by 1.34 points against SCHD itself. Over the last year it missed by more than eleven.
Two footnotes worth knowing. DIVO's 0.01% of acquired fund fees comes from holding other funds, including an affiliated one; Amplify's semi-annual report says the adviser contractually waives the proportionate advisory fee on DIVO's assets invested in the Amplify Samsung SOFR ETF, which reduced the management fee by $253,807 in the six months to 31 March 2026. And DIVO's shareholder report shows costs actually paid over the year to 30 September 2025 of $58 per $10,000, or 0.54%, slightly below the prospectus figure.
The figures above are backward-looking arithmetic and issuer-prepared illustrations, not projections. This is educational information, not personalized investment advice. All investing carries the risk of loss, and past performance does not guarantee future results.
Which One Fits You
If you are drawing income now and the monthly amount is the point, DIVO does the job SCHD does not. It pays monthly rather than quarterly, it pays roughly 4.8% of NAV rather than 3.0%, and on the 2025 tax mix it still left more cash after federal tax on the same capital. Buy it understanding three things: you are paying 0.56%, you have sold part of your upside, and some years a chunk of what arrives will be your own capital coming back with a reduced cost basis attached.
If you are still accumulating, the case for DIVO is much weaker. You do not need the cash, you are paying more than nine times the fee to get it, and you are capping the upside in the years that do the compounding. Reinvesting a distribution that is partly option premium and partly your own capital is an expensive way to own large-cap US stocks. SCHD at 0.06% is the more natural holding, and a total-market fund may be more natural still; we cover that choice in SCHD vs VTI.
If the account is taxable, the tax character deserves a hard look. SCHD's distributions were 100% qualified dividend income in its last fiscal year. DIVO's qualified share has moved from 98.82% to 41.04% in two years and is not something you can plan around. The return of capital component is a deferral rather than a saving, and it complicates your basis records. Inside an IRA or a 401(k) none of this matters and the comparison is purely cost and total return.
Do not read the 4.84% as a dividend yield. If what you actually want is a higher yield from company dividends, DIVO is the wrong fund: its stocks yield 1.35% against SCHD's 3.32%. If what you want is a larger cheque regardless of where it comes from, DIVO is doing precisely what it says on the label.
Owning both is defensible, unusually for a fund pair. They overlap far less than most SCHD comparisons, sharing only Chevron and Amgen in their top tens, and their sector weights are close to inverted. A blend gives you some option income without capping the whole portfolio. It also blends the two fee levels, so size the DIVO sleeve to the income you actually need rather than treating it as a core holding.
If you already hold one in a taxable account, switching realises whatever gain you are sitting on. Redirecting new contributions is the low-friction version of changing your mind.
Sources & Methodology
Every figure on this page was read from an issuer's own SEC filing, an issuer's own tax document or the issuer's own fund page. None came from a fund screener, a data aggregator or another comparison site.
- Amplify ETF Trust, Form 485BPOS filed 28 January 2026: contains the Amplify CWP Enhanced Dividend Income ETF prospectus dated 28 January 2026. Source for the active-management language, the 80% policy, the 20 to 25 stock portfolio, the 8% and 30% caps, the 2% to 4% option income target, the tactical-coverage language, the covered call risk, the tax and return of capital language, the 0.56% fee table, the cost example, the 94% turnover, the audited per-share financial highlights back to fiscal 2020 and the standardized returns to 31 December 2025.
- Amplify ETF Trust, Form N-CSR for the fiscal year ended 30 September 2025: the covered-call underperformance statement, the 13.56% NAV return against the S&P 500's 17.60% and the BuyWrite Index's 8.15%, net assets of $5,246,165,843, 36 holdings, the tax composition of distributions for fiscal 2024 and 2025, and the 41.04% qualified dividend income figure.
- Amplify ETF Trust, Form N-CSR for the fiscal year ended 31 October 2023: the $72,626,691 of return of capital, the fiscal 2022 composition and the 98.82% qualified dividend income figure.
- Amplify ETF Trust, Form N-CSR for the period ended 30 September 2024: the 46.46% qualified dividend income figure.
- Amplify ETF Trust, Form N-CSRS for the period ended 31 March 2026: net assets of $6,625,279,196, 34 holdings, 43% turnover and the SOFR ETF advisory fee waiver.
- DIVO Form N-PORT-P for the period ended 30 June 2026, together with the filings for 30 September 2025, 31 December 2025 and 31 March 2026: the complete portfolio including every written call, used for the coverage table.
- Amplify, DIVO fund page: the 4.84% distribution rate, the 1.35% 30-day SEC yield, the issuer's own definitions of both, net assets, holdings count, the 0.56% total expense ratio, sector allocation, top ten holdings, the monthly distribution history and the trailing returns to 31 August 2026.
- Amplify Tax Center: DIVO's monthly Form 19(a)-1 notices and the Primary Layout year-end tax reporting information for 2023, 2024 and 2025.
- Schwab Strategic Trust, Form 485BPOS filed 22 December 2025: the Schwab U.S. Dividend Equity ETF prospectus dated 22 December 2025. Source for the indexing language, the index rules, the 4.0% and 25% caps, the 0.06% fee table, the cost example, the 30% turnover, the tax language and the standardized returns to 31 December 2024.
- Schwab Strategic Trust, Form N-CSR for the fiscal year ended 31 August 2025: the $2,469,946,295 of ordinary income distributions, the identical $2,469,946,295 of qualified dividend income, the 98.60% dividends received deduction, 100 holdings and net assets of $72.6bn at that date.
- Schwab Asset Management, SCHD fund page: the 3.32% SEC yield, the 3.00% trailing distribution yield, net assets, holdings count, turnover, sector weights, top ten holdings and the trailing returns to 31 August 2026.
How the fee tables were located. Amplify's January 2026 filing is a single 24 megabyte document covering roughly twenty-nine funds, each with its own fee table, and Schwab's covers eight. Picking the table nearest a ticker mention is how comparison pages end up quoting the wrong fund. Both tables here were found by anchoring on the fund summary heading, "AMPLIFY CWP ENHANCED DIVIDEND INCOME ETF, Summary Information, INVESTMENT OBJECTIVES" and "Schwab U.S. Dividend Equity ETF, Ticker Symbol: SCHD, Investment Objective", and reading the fee table immediately below each one. Both were then cross-checked against the issuer's fund page and its annual report.
What we could not verify, stated rather than guessed. We cannot tell you the final tax character of DIVO's calendar 2026 distributions: the monthly notices estimate 69% return of capital on a book basis, the notices themselves say that may change, the same estimate was reversed to zero in both 2024 and 2025, and Amplify's 2026 year-end tax report does not exist yet. We cannot tell you DIVO's average option coverage, only what four quarter-end filings show. We cannot break DIVO's actual distributions into dividend income and option premium, because no issuer document does; the 2% to 4% premium figure in this page is the prospectus target, not an outcome. The two funds' standardized after-tax returns carry different as-of dates, 31 December 2025 for DIVO and 31 December 2024 for SCHD, because Schwab has filed no later performance supplement, so those figures are printed separately and not subtracted. The qualified dividend income percentages come from fiscal years ending on different dates, 30 September for Amplify and 31 August for Schwab. Amplify's own documents disagree about DIVO's inception by one day, 13 December 2016 in the prospectus and 14 December 2016 on the fund page. And no issuer publishes a percent-of-portfolio-overwritten statistic for DIVO, so every coverage figure here is our own calculation from N-PORT and is labelled as such.
This article is for general education and is not investment, tax or legal advice. Fund data changes daily, index returns are unmanaged and cannot be invested in directly, covered-call strategies limit participation in rising markets while retaining the risk of loss, return of capital reduces your cost basis and may increase a future capital gain, and past performance does not guarantee future results. All investing carries the risk of loss. Check current figures with the issuer and consider speaking with a licensed financial professional or tax adviser before making a decision.
FAQ: DIVO vs SCHD
Is DIVO better than SCHD?
Neither is better in general. Over the five years to 31 August 2026 DIVO returned 11.35% a year against SCHD's 10.01%; over the year to the same date it returned 18.28% against 29.45%. DIVO pays more cash more often and costs nine times as much. SCHD is cheaper, more tax-efficient and keeps the full upside. Pick by what you need the money to do.
Why is DIVO's yield so much higher than SCHD's?
It is not, on the measure that means dividends. DIVO's 30-day SEC yield is 1.35% and SCHD's is 3.32%. DIVO's headline 4.84% is a distribution rate, which is the annualised cash payout over NAV. The gap is option premium and, in some years, return of capital. Amplify's own definition says the SEC yield excludes option income.
Does DIVO pay return of capital?
It has, heavily, in some years and not at all in others. Its Form 1099 reporting shows $0.91 of the $1.71 distributed per share in calendar 2023 as a nondividend distribution, and zero in both 2024 and 2025. The monthly Form 19(a)-1 notices currently estimate 69% for 2026 to date, but those are book-basis estimates that the last two year-end reports reversed to zero. Return of capital is not taxed when received and instead reduces your cost basis.
Is DIVO's income qualified dividend income?
Partly. In the fiscal year to 30 September 2025, 41.04% of DIVO's ordinary income distributions were designated as qualified dividend income; in the year to 31 October 2023 it was 98.82%. SCHD's figure for its year to 31 August 2025 was 100%. DIVO's prospectus states that "the presence of covered call options in the portfolio may reduce the amount of dividends that are eligible for capital gains rates."
How much of DIVO has covered calls written on it?
Far less than most people assume. At 30 June 2026 the fund had two written call positions covering about 2.06% of net assets. At 30 September 2025 it had twelve covering about 11.55%. Those are our calculations from DIVO's own Form N-PORT filings, and they are quarter-end snapshots of short-dated options, not an average.
Does the covered call strategy hurt returns?
In rising markets, yes, by design. DIVO's annual report for the year to 30 September 2025 says so directly: when a stock rises above the strike, "the upside to the Fund is limited. This was also a contributor to the underperformance over the Period." The prospectus warns that "as the Fund sells (writes) covered call option contracts over more of its portfolio, its ability to benefit from capital appreciation becomes more limited."
Which is better for retirement income?
DIVO delivers the larger monthly cheque, and on the 2025 distribution mix it still leaves more after federal tax on the same capital. The trade is a 0.56% fee, a capped upside and a payout whose composition you cannot predict. If you need a specific monthly figure and will spend it, DIVO is built for that. If you can live on 3% and want the portfolio to keep growing, SCHD does less damage to the capital.
Should I own both DIVO and SCHD?
It is more defensible than most fund pairs, because they overlap unusually little. Their top tens share only Chevron and Amgen, and DIVO holds 17.08% technology against SCHD's 9.23% while SCHD holds 20.72% health care against DIVO's 8.23%. Owning both blends the fee levels too, so size the DIVO sleeve to the income you actually need.
Which is better in a Roth IRA?
The tax argument disappears inside a Roth, since nothing distributed is taxed as it arrives, so the comparison reduces to cost and total return. That favours SCHD at 0.06% unless you specifically want the monthly payout and accept the capped upside. A tax-advantaged account also makes it painless to change your mind later, because selling triggers no tax bill.
Cite This Page
Journalists, educators and bloggers are welcome to cite this comparison. Please link back so readers can reach the underlying filings.
"DIVO vs SCHD: A 4.84% Payout Against a 3.32% Dividend Yield." Wealthy Pot, 2026. https://wealthypot.com/divo-vs-schd/
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