A Covered Call ETF That Pays 6% Is Beating Vanguard’s Biggest International ETF Right Now

IDVO is not a typical covered call ETF: The fund writes calls on individual stocks rather than systematically selling index calls, helping preserve more upside potential.

Total return has been the real story: Despite yielding "only" 6.08%, IDVO outperformed VXUS over the past 3.75 years on a total return basis.

Yield alone can be misleading: Some of the best covered call strategies focus on balancing income and growth rather than maximizing distributions at the expense of long-term returns.

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As a general rule of thumb, I usually expect covered call ETFs to underperform their long-only counterparts. Between the tax drag created by frequent distributions, the higher fees, and the simple reality that your upside is capped while you retain most of the downside exposure, the math generally works against you.

Personally, if the goal is income, I'd rather see investors sell shares as needed and benefit from the more favorable tax treatment of long-term capital gains. Still, there are exceptions.One that's been on my radar recently is the Amplify CWP International Enhanced Dividend Income ETF (IDVO).

Over the 3.75-year period from Sept. 8, 2022, through June 8, 2026, it delivered a 21.54% annualized total return, outperforming the Vanguard Total International Stock ETF (VXUS ), which returned 18.22% annualized over the same period.

This isn't your average covered call ETF, though. Unfortunately, it's also one that many investors overlook because the headline yield appears modest compared to many competitors, even though the total return profile has been remarkably strong. Here's what you need to know.