CI Alternatives Diversified Opportunities ETF Maintains Steady Dividend Amid Market Volatility

The CI Alternative Diversified Opportunities Fund ETF (CMDO) has announced a consistent CAD $0.064 per unit dividend for its February and March 2025 distributions, underscoring its strategy of steady payouts despite the fund’s use of volatile alternative investment tactics. The ETF, part of CI Global Asset Management’s lineup, targets investors seeking exposure to non-traditional strategies such as derivatives, short selling, and leverage—while balancing the appeal of monthly cash flows.

Key Dividend Details

The February 2025 distribution will be paid on or before February 28 to shareholders of record as of February 24, with the ex-dividend date falling on the same day. March’s distribution follows the same pattern, with an ex-dividend and record date of March 25 and a payment date of March 31. This marks the continuation of a consistent payout since at least December 2024, when CMDO also distributed CAD $0.064 per unit.

The CAD-denominated ETF’s monthly dividend aligns with its “Liquid Alternative” designation, which allows for dynamic portfolio adjustments. However, investors should note that the fund’s USD counterpart (CMDO.U) mirrors these distributions in U.S. dollars, reflecting its dual-currency structure.

Risks and Strategies to Consider

While the steady dividend is attractive, CMDO’s use of leverage (up to 3x net asset value) and alternative strategies introduces heightened volatility risks. The fund’s prospectus warns that derivatives, short selling, and borrowing can amplify losses in adverse markets—a critical factor for income-focused investors.

Additionally, the fund’s 1.96% management expense ratio (MER) as of 2023 is notably higher than the average ETF fee, which typically ranges between 0.10% and 0.75%. This elevated cost structure reduces net returns and may offset the modest dividend yield.

Historical Context: A Short Track Record

The ETF, launched in August 2021, has a limited dividend history. The provided data only confirms consistent $0.064 monthly distributions since December 2024, with no explicit details for 2022 or 2023. The fund’s abbreviated lifespan—just over three years—means investors cannot assess long-term trends or resilience during full market cycles.

Who Should Invest?

CMDO’s blend of alternative strategies and steady dividends positions it as a niche holding for investors willing to tolerate volatility for potential outperformance. The CI Distribution Reinvestment Plan (DRIP) offers a way to compound returns, though cash payouts remain the default.

Conclusion: A High-Risk, High-Return Proposition

The CI Alternative Diversified Opportunities ETF’s $0.064 dividend reflects a disciplined payout strategy, but its use of leverage and alternative tactics demands caution. With an MER of 1.96%, the fund’s success hinges on its ability to generate returns exceeding its costs—a challenge in low-volatility or sideways markets.

Investors should weigh CMDO’s $19.5552 net asset value as of September 2024 against its risks. While the ETF’s parent, CI Financial Corp. ($529.4 billion AUM as of late 2024), provides institutional backing, the fund’s short history and high fees make it more suitable for sophisticated investors comfortable with alternative investments. For others, lower-cost, traditional income vehicles may offer better risk-adjusted returns.

In sum, CMDO’s dividend is a stable feature in an otherwise turbulent strategy—a trade-off that will appeal only to those who prioritize diversification over predictability.