IDVO is a 15% ($150,000) position: ~6% yield, ~$8,955 income, 3% five-year dividend growth. It adds international dividend diversification; calls on only ~50% of holdings let NAV grow and distributions rise. Distribution rose from ~12 cents (Sept 2022) to 21 cents, though 3% growth may seem low, not overly optimistic.

So, the next position we will add will again be a fundamental position, an ETF that will add another layer of diversification, and that is the Amplify ETF's IDVO. We will give it about 15 percent weight , which means we are allocating $150,000.

Its starting yield over the past 12 months was about 6 percent, which means it will generate about $8,955 in income, and we are estimating a 5- year dividend growth rate of about 3 percent.

This is a very unique fund, because consider that in the case of GPIQ, one of the reasons for their distribution growth and net asset value growth over time is the low rate of portfolio option coverage.

IDVO is also quite unique in that respect, because if we go to the fund's page, there are listed reasons to invest in IDVO. The reason is that there are two potential sources of income here.

IDVO seeks to secure income from international dividend-paying stocks.

So, the first one is international dividend paying stocks. We now have exposure to international markets , which was not previously in our portfolio, which is an added layer of diversification.

Not only that , but these are stocks that actually pay dividends. So, we're not just making money by writing options on the underlying holdings, these are positions that actually pay dividends and this is again a very well diversified ETF.

In addition, they take advantage of the opportunity to write covered calls on those stocks and increase their distribution. And the word 'opportunistically' is the key word here.

For example, look again at the covered call ETF database. If we look at Amplify's IDVO, let's zoom in and take a closer look at this ETF. If we scroll all the way down, we'll see the portfolio options coverage, which is only around 50 percent.

That is, they are writing options on only 50 percent of the portfolio. Naturally, what happens as a result of this is that this fund is able to take a larger share of the profits.

So, now we can increase the distribution in two different ways. First, the underlying holdings are increasing their dividends over time, which the fund then distributes to shareholders.

But, secondly, since they are only writing options on 50 percent of the portfolio , the net asset value continues to grow , which means they can increase distributions over time.

But, secondly, since they are only writing options on 50 percent of the portfolio, the net asset value continues to grow, which means they can increase distributions over time.

Take a look at what it's actually been like over the past few years. In September 2022, the distribution was about 12 cents per month. According to the latest distribution, it was 21 cents.

So, the growth of distribution in a very short period of time is very strong.

The reality is that 3 percent distribution growth may seem a bit low based on a five-year dividend CAGR. It certainly could have been more. But again, the goal is not to be overly optimistic.