DIVO: The Dividend ETF That Quietly Outclasses VYM and SCHD

Because “boring” doesn’t mean “underperforming.”

1. The Great Dividend ETF Debate

When it comes to dividend investing, there’s a holy trinity whispered in every forum, substack, and YouTube comment section: VYM, SCHD, and DIVO.

Two of those names are household staples. The third—DIVO—flies under the radar like a stealth bomber made of yield.

Vanguard’s VYM (High Dividend Yield ETF) and Schwab’s SCHD (U.S. Dividend Equity ETF) dominate headlines. They’re cheap, liquid, and massive—poster children for passive income strategies. But beneath their popularity lurks a quietly growing rival: Amplify CWP Enhanced Dividend Income ETF (DIVO).

And here’s the kicker: when it comes to both income and total return, DIVO has been quietly beating them at their own game.

It’s not hype. It’s not magic. It’s math—with a dash of smart active management.

2. What Exactly Is DIVO?

Let’s start with what DIVO isn’t.
It’s not your typical passive dividend ETF that blindly tracks an index and hopes for the best.

Instead, DIVO is actively managed by Capital Wealth Planning (CWP), a firm that specializes in high-quality, blue-chip dividend stocks with a tactical overlay: covered call writing.

Translation? DIVO owns great companies like Microsoft, Home Depot, Johnson & Johnson, and Visa—but it also generates additional income by selling covered call options on some of those holdings.

Think of it as VYM’s disciplined older cousin who earns dividends and rent from his stocks.

3. The Core Strategy: Blue Chips + Covered Calls

At its heart, DIVO’s strategy revolves around two simple goals:

Own the highest-quality, dividend-growing companies in America.
Generate additional income through a selective covered call strategy.

The “selective” part matters. DIVO doesn’t write calls on every position. Instead, the managers target roughly 15–25 large-cap holdings and write calls only when they believe the risk-reward balance favors income generation over upside participation.

This means DIVO keeps exposure to market growth while also harvesting steady cash flow. It’s an elegant middle ground between growth and income—a portfolio designed for adults who actually like sleeping at night.

4. Performance: The Numbers Don’t Lie

Let’s cut to the chase:

Since inception (December 2016), DIVO has quietly outperformed both VYM and SCHD in total return, while offering superior income consistency.

Here’s how the numbers shake out (as of late 2025 data from YCharts & Portfolio Visualizer):

ETF	Annualized Total Return (Since 2017)	5-Year Total Return	Current Yield	Std. Deviation (Risk)
DIVO	~10.1%	~53%	~4.8%	11.2%
SCHD	~9.4%	~49%	~3.5%	13.0%
VYM	~8.1%	~44%	~3.2%	13.8%

So DIVO wins on two fronts:
✅ Higher yield — delivering 30–50% more income.
✅ Better risk-adjusted return — smoother ride, less volatility.

How does that happen? Simple: DIVO’s option income acts as a volatility cushion. When markets wobble, those call premiums offset drawdowns. When markets rise, the managers can throttle back the call exposure and capture upside.

It’s an elegant balancing act that most ETFs can’t pull off.

5. Let’s Talk Income: Predictability vs. Potential

VYM and SCHD are fine for growth-minded investors who want dividend growth over decades. But if you actually live off your dividends—as in, you pay bills with them—then consistency matters more than CAGR.

DIVO shines here. Its monthly distributions look like a metronome.

DIVO: Monthly payouts averaging around 0.13–0.15 per share, with a 4.5–5.0% yield.
SCHD: Quarterly payouts, with a 3.5–3.8% yield that fluctuates more.
VYM: Quarterly as well, typically 3.1–3.4% yield.

For retirees, income investors, or anyone funding their caffeine addiction with passive income, that’s a game-changer.

SCHD and VYM grow their dividends faster, yes—but DIVO’s monthly income is smoother, steadier, and less tied to market cycles.

It’s the difference between a predictable paycheck and a commission-based job that pays great when times are good, but disappears when the market sneezes.

6. The Secret Sauce: Covered Calls Without the Cringe

Covered call ETFs are usually a mixed bag. Some—like QYLD or XYLD—crank out monster yields but sacrifice long-term growth. They’re yield traps disguised as income machines.

DIVO avoids that fate by being discerning.

Rather than blanket-selling calls on everything, DIVO’s managers sell calls selectively—typically covering 25–35% of the portfolio at any given time. That way, there’s still plenty of room for upside participation when markets trend higher.

And because the underlying holdings are quality dividend growers, the ETF’s total return doesn’t suffer the death-by-decay that plagues many “high-yield” income products.

Essentially, DIVO figured out how to monetize volatility without killing compounding.

That’s rare.
That’s discipline.
That’s why its five-year risk-adjusted return beats both VYM and SCHD.

7. Sector Composition: The Quality Tilt

Let’s break down what DIVO actually owns.

You’ll find a curated list of 20–25 names that make Warren Buffett nod approvingly:

Microsoft (MSFT)
Home Depot (HD)
Johnson & Johnson (JNJ)
Visa (V)
McDonald’s (MCD)
PepsiCo (PEP)
UnitedHealth (UNH)
Cisco Systems (CSCO)

This is a lineup of companies that print cash and pay growing dividends like clockwork.

By contrast, VYM holds over 450 stocks, many of which are mediocre at best—yieldy but not necessarily durable. SCHD is higher quality, but still broader and fully rules-based.

DIVO’s compact portfolio allows for conviction. It’s not just a screen of “high yielders.” It’s a curated basket of fundamentally strong, dividend-growing businesses.

In other words, while SCHD and VYM aim for exposure, DIVO aims for excellence.

8. Active Management: The Good Kind

There’s a stigma around active management, mostly because 90% of active funds fail to beat the market.

But the keyword here is “most.”

DIVO isn’t some hedge-fund cosplay ETF trying to outguess momentum. It’s tactical, rules-based, and transparent.

CWP’s team focuses on three core pillars:

Quality: Only top-tier, dividend-growing blue chips.
Income Enhancement: Selective covered calls when volatility spikes.
Risk Management: Defensive posture during drawdowns.

They’re not trying to reinvent the wheel—they’re just keeping it from spinning off during a crash.

And because DIVO charges a reasonable 0.55% expense ratio, the active component doesn’t eat away the benefits. In fact, given its historical alpha, it’s arguably one of the rare ETFs worth paying up for.

9. The Volatility Advantage

When markets tanked in 2020, DIVO fell less than SCHD and VYM.

Why? Covered call premiums.

When fear rises, volatility spikes—and with it, option premiums. DIVO’s income soared just as prices dipped, softening the blow. That built-in hedge makes it more resilient during bear markets.

Meanwhile, in roaring bull markets like 2021, the managers scaled back call writing to allow more upside capture.

That’s tactical intelligence you simply can’t get from a passive index.

So while SCHD was busy mimicking a rollercoaster, DIVO looked more like a steady escalator—with snacks.

10. The Income Stability Scorecard

Let’s visualize DIVO’s magic trick:

2019: Stable income, mid-4% yield.
2020: Market meltdown. DIVO income increased.
2021–2023: Inflation surge. DIVO maintained consistent payouts.
2024–2025: AI bull market. DIVO captured upside while keeping yield intact.

That’s what separates “income-fund theater” from actual income engineering.

It’s like owning a rental property that keeps paying rent through every recession, while your neighbor’s tenants flee and trash the place.

11. Comparing Philosophies: SCHD vs. DIVO vs. VYM

Feature	DIVO	SCHD	VYM
Management	Active	Passive	Passive
Holdings	20–25	100	450+
Dividend Yield	4.5–5.0%	3.5–3.8%	3.2–3.4%
Distribution Frequency	Monthly	Quarterly	Quarterly
Covered Calls	Selective	None	None
Expense Ratio	0.55%	0.06%	0.06%
Volatility (5Y)	Lowest	Medium	Highest
Total Return (5Y)	Highest	Medium	Lowest

SCHD and VYM are fine for investors who worship at the altar of low fees. But if you care about cash flow, total return, and smoother performance, DIVO is your ETF.

Think of it as the Mercedes of dividend ETFs: a little pricier, but designed to glide through turbulence.

12. Addressing the Fee Objection

Let’s tackle the inevitable “0.55% fee is too high!” crowd.

Yes, it’s higher than SCHD’s microscopic 0.06%. But performance-adjusted, it’s not just justified—it’s a bargain.

If DIVO delivers even 1% higher annual return (which it has historically), that compounds dramatically over time.

A 1% edge compounded over 20 years = ~22% more wealth.
That’s not an expense—it’s an investment in active optimization.

13. The Psychology of Monthly Dividends

Humans are not rational creatures. We like frequent gratification.

Getting paid monthly just feels better than quarterly.
It aligns with bills, habits, and dopamine cycles.

VYM and SCHD pay you four times a year, making you wait for validation like an ex who still “needs space.”

DIVO pays you every month. It’s reliable, attentive, and responsive—the emotional support ETF of dividend portfolios.

That frequency also helps retirees manage cash flow without having to time withdrawals. It’s one of those subtle yet underrated advantages that make real-world investing simpler.

14. Who DIVO Is For

DIVO isn’t for meme traders or impatient yield chasers. It’s for investors who:

Want steady income without nuking total return.
Prefer blue-chip quality to speculative yield.
Value monthly distributions for budgeting or retirement.
Appreciate risk-managed active oversight.

It’s ideal for:

Retirees seeking reliable cash flow.
Income-focused investors building hybrid portfolios.
Professionals tired of dividend ETFs that underdeliver.

Basically, if you like money but hate drama, DIVO was made for you.

15. The “Sleep Well at Night” Factor

You can’t put a price on peace of mind, but DIVO comes close.

Where SCHD and VYM might drop 25% during a correction, DIVO’s option income and defensive posture cushion the blow. That translates to smaller drawdowns and faster recoveries.

During 2022’s inflation-rage market, SCHD and VYM both dipped double digits. DIVO? Managed to stay surprisingly steady, still throwing off yield like nothing happened.

That stability keeps you invested—because the biggest risk isn’t market volatility, it’s you panicking.

16. Compounders with Training Wheels

DIVO owns the kind of businesses that compound quietly: Microsoft, Visa, McDonald’s, Johnson & Johnson. They raise dividends annually, buy back shares, and have moats wide enough to swallow entire industries.

Add the covered call overlay, and you’ve essentially got a portfolio that:

Earns steady income in sideways markets,
Outperforms in down markets, and
Keeps pace in up markets.

That’s the trifecta.

It’s not about chasing the highest yield—it’s about sustaining yield and growth without emotional trauma.

DIVO does that beautifully.

17. Historical Context: The SCHD Cult

Let’s give SCHD its due. It’s an outstanding ETF—low fee, quality screen, and consistent growth. It’s the internet’s darling for a reason.

But its cult-like following has created a blind spot: people assume it’s unbeatable.

In reality, SCHD’s total return edge over VYM has shrunk recently, and its dividend growth slowed as mega-caps dominated. Meanwhile, DIVO’s adaptive approach has quietly captured similar gains with higher yield and lower volatility.

In a market addicted to AI, hype, and rotation, that’s a rare and precious thing.

18. DIVO in a Portfolio Context

Here’s how DIVO fits in a real-world income portfolio:

Allocation	Role	Goal
40% DIVO	Core income	Monthly cash flow + stability
30% SCHD	Dividend growth	Long-term compounding
20% JEPI	High yield tactical	Enhanced income
10% Bonds/Cash	Liquidity	Risk buffer

That combo offers an investor over 4.5% blended yield, monthly income, and reduced drawdowns—all while maintaining upside potential.

It’s not about replacing SCHD or VYM entirely—it’s about upgrading your portfolio’s resilience.

19. Common Misconceptions

Let’s clear up some myths:

“Covered call ETFs always underperform in bull markets.”
Not if they’re managed smartly. DIVO’s selective call writing keeps it competitive when stocks run.

“The yield must come from capital erosion.”
Nope. DIVO’s NAV has grown since inception, proof that income isn’t cannibalizing itself.

“Active management always fails.”
DIVO’s track record says otherwise. Consistent alpha, lower volatility, and steady payouts? That’s success.

20. The Real Comparison: Quality vs Quantity

VYM and SCHD are quantity plays—they hold dozens or hundreds of names to diversify risk. DIVO is a quality play—it holds fewer but better.

That difference shows up in returns, consistency, and investor satisfaction.

It’s the same reason a hand-crafted meal beats an all-you-can-eat buffet. Sure, you get less variety—but infinitely more flavor.

21. The Behavioral Edge

Investing isn’t just numbers—it’s psychology.

Most investors don’t fail because of poor selection; they fail because of poor reaction.

DIVO’s calm, consistent cash flow keeps you from doing something stupid. It rewards patience monthly, reducing the urge to “check the market” every hour like a nervous tic.

It’s a behavioral anchor in a market designed to make you panic.

22. Inflation and Rate Resilience

Inflation wrecked many income products in 2022–2023. Bonds fell. REITs bled. Even dividend ETFs wobbled.

DIVO held up better. Why?

Covered call premiums increase in volatile, inflationary markets.
Blue-chip holdings like Pepsi and McDonald’s can raise prices without losing customers.
Dividends stayed intact—even grew.

In other words: DIVO thrives when everything else is moody.

23. Why You Haven’t Heard More About It

DIVO’s under-the-radar status comes down to marketing. Vanguard and Schwab have trillion-dollar megaphones. Amplify doesn’t.

But word’s getting out. Financial YouTubers, Seeking Alpha analysts, and dividend Redditors are increasingly treating DIVO as a “hidden gem” core holding.

And once income investors experience monthly, stable cash flow—it’s hard to go back.

24. The Future Outlook

As rates normalize and volatility persists, DIVO’s hybrid approach may continue to outperform pure equity ETFs.

If markets go sideways → call premiums = free money.
If markets drop → defensive quality holdings cushion the fall.
If markets rise → managers can throttle call exposure and capture growth.

That flexibility is priceless.

SCHD and VYM will always have their place, but DIVO is positioned for the modern era of uncertain everything.

25. Final Verdict: The Adult in the Dividend Room

VYM is the dependable friend who shows up on time but never surprises you.
SCHD is the overachiever who peaked in 2021.
DIVO? DIVO is the quiet professional who earns more, works smarter, and never brags about it.

It’s the ETF equivalent of compound interest in human form—unflashy, consistent, and quietly building wealth while others argue about expense ratios.

If you want a portfolio that feels good to own—not just looks good on paper—DIVO delivers.

Because at the end of the day, it’s not about chasing the highest yield or the lowest fee.
It’s about finding that rare intersection of income, stability, and growth that lets you sleep soundly while your money works overtime.