Are you looking for steady, high-yield returns in a shaky market? The JPMorgan Equity Premium Income ETF (JEPI) might be what you need1. It has a 30-day SEC yield of 7.55% as of May 31, 20241. This makes it a great choice for those wanting a steady income.
Key Takeaways
- JEPI offers a high 30-day SEC yield of 7.55% as of May 31, 20241
- The fund has an average annual return of 12.57% since its inception in May 20201
- JEPI invests in equities and uses an options overlay to generate consistent income
- The fund has a relatively low expense ratio of 0.35%1
- JEPI provides monthly dividend payouts for income investors
What is JEPI?
JEPI stands for the JPMorgan Equity Premium Income ETF. It aims to give investors monthly income and equity market exposure with less risk2. The fund puts money into a defensive equity portfolio of U.S. large-cap stocks. It also uses a disciplined options strategy to earn more income2.
JPMorgan Equity Premium Income ETF (JEPI)
The JPMorgan Equity Premium Income ETF (JEPI) is made to offer steady premium income with less market volatility2. It focuses on making a regular income. This comes from dividends from its defensive equity portfolio and premiums from its options strategy2.
Seeking consistent premium income with lower volatility
JEPI’s strategy is to give investors consistent premium income and lower portfolio risk2. Its defensive equity and options overlay work together. They create a low-risk way for investors to earn income with a stable return2.
By mixing these strategies, the JPMorgan Equity Premium Income ETF offers a special way to be part of the equity market. It aims to give investors a steady monthly income and lower risk2.
JEPI’s Investment Strategy
The JPMorgan Equity Premium Income ETF (JEPI) has a special way to make sure investors get steady income. It uses two main parts: a defensive equity portfolio and a smart options overlay3.
Defensive Equity Portfolio with Stock Selection
JEPI picks U.S. large-cap stocks using a detailed research method for its defensive equity portfolio. This approach aims for lower volatility and a lower market risk3. It’s designed to offer stable returns and protect money during market drops.
Disciplined Options Overlay for Income Generation
JEPI also has a smart options overlay strategy. It writes out-of-the-money S&P 500 Index call options to earn extra income every month3. This strategy changes with the market, offering more income when things get volatile or interest rates go up4.
By mixing the defensive stocks with the options strategy, JEPI works to give investors steady premium income and lower risk34. This unique strategy makes JEPI stand out from other equity income funds. It’s great for investors looking for regular monthly income.
| Key Components of JEPI’s Investment Strategy |
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“JEPI leverages over 20 research analysts and a proprietary process spanning over 30 years to select attractive stocks across sectors for its diversified equity portfolio.”4
JEPI’s fresh approach makes it a top choice for investors wanting steady monthly income and a safer equity investment.
JEPI’s Portfolio Managers
The JPMorgan Equity Premium Income ETF (JEPI) is led by Hamilton Reiner and Ralph Zingone. They have over 60 years of experience in the investment world5.
Hamilton Reiner brings 37 years of experience, working at JPMorgan for 15 years. Ralph Zingone has been with the firm for his entire 33-year career. They use insights from over 20 experienced analysts to manage JEPI’s portfolio5.
Expertise in Equities and Derivatives
Reiner and Zingone know a lot about equities and derivatives. They use this knowledge to make JEPI’s investment strategy. This strategy combines a defensive stock portfolio with a smart options strategy to earn regular income5.
They understand the market and options trading well. This helps them handle market ups and downs. JEPI offers a steady flow of income, making it a good choice for those looking for high returns with less risk5.
“Hamilton and Ralph’s expertise in equities and options trading is a key differentiator for JEPI, allowing them to generate consistent income for investors while managing risk.” – Industry Analyst
With their successful track record and JPMorgan’s support, Reiner and Zingone are set to keep delivering strong results for JEPI investors5.
JEPI’s Attractive Yield
The JPMorgan Equity Premium Income ETF (JEPI) has a high dividend yield. As of March 31, 2023, its 12-month rolling dividend yield was 7.98%. This is much higher than other major asset classes like U.S. high yield, U.S. equity, U.S. 10-year bonds, and global REITs6. JEPI also had a 30-day SEC yield of 6.98%.
JEPI is great for investors looking for steady income. It has over $3.5 billion in assets as of April 2023 and charges only 0.35% in fees6. This makes it a good choice for those wanting high income with low costs.
JEPI has a better yield than some similar funds. For example, JEPQ has a 0.29% fee but a 13.4% yield, with $300 million in assets6. SCHD has a 0.06% fee but a 3.4% yield, with $24 billion in assets6. JEPI offers a good balance of yield, fees, and diversification for investors.
| Fund | Dividend Yield | Expense Ratio | Assets Under Management |
|---|---|---|---|
| JEPI | 7.98% | 0.35% | $3.5 billion |
| JEPQ | 13.4% | 0.29% | $300 million |
| QYLD | 13.2% | 0.60% | N/A |
| SCHD | 3.4% | 0.06% | $24 billion |
JEPI’s high yield is tempting, but its dividends are not qualified. This means higher taxes compared to some other ETFs like SCHD3. Also, JEPI might not do well in bull markets because of its defensive strategy and options overlay3.
Despite holding aggressive stocks from the S&P 500, JEPI underperformed the index in total returns over the past three years, with negative price returns contrasting with the index’s nearly 30% rise3.
JEPI is a strong choice for income-focused investors with its high yield, low fees, and defensive strategy. But, investors should think about the fund’s downsides too.
jepi stock: High-Yield ETF for Monthly Income
For those looking for steady monthly income, the JPMorgan Equity Premium Income ETF (JEPI) is a top choice. It uses a special strategy. This strategy mixes a defensive stock portfolio with options to offer attractive income to investors.
JEPI’s success in giving reliable income comes from its detailed approach. Its managers, Hamilton Reiner and Ralph Zingone, pick large-cap U.S. stocks for their quality and stability. JEPI has 135 holdings with no stock more than 1.75% of the total7. This makes the fund well-diversified and reduces risk from any single stock.
JEPI also uses a smart options strategy. By selling call options on its stocks, the fund earns extra income. JEPI has a 30-day SEC yield of 6.98% and a 12-month dividend yield of 8.5%8. This makes it a great pick for those wanting regular income.
With an annual return of 6.98%, investing $500 monthly for 30 years could grow to over $611,1087. This shows JEPI’s potential to be a steady income source for investors.
| Metric | Value |
|---|---|
| Net Assets | $33.74 billion8 |
| NAV | $56.338 |
| PE Ratio (TTM) | 24.598 |
| Yield | 7.34%8 |
| YTD Daily Total Return | 6.17%8 |
| Beta (5Y Monthly) | 0.598 |
| Expense Ratio (net) | 0.35%8 |
The Motley Fool Stock Advisor team didn’t pick JPMorgan Equity Premium Income ETF as one of the top 10 stocks7. Yet, JEPI’s performance and strategy have earned it a Morningstar Bronze Medalist rating. This shows its ability to offer steady income with less market volatility.
The jepi stock, or the JPMorgan Equity Premium Income ETF, is a strong choice for jepi high-yield etf investors. It combines a defensive stock portfolio with a smart options strategy. This approach aims to provide consistent income while keeping risk and volatility low.
JEPI’s Performance and Ratings
Since May 2020, the JPMorgan Equity Premium Income ETF (JEPI) has shown strong performance and received praise. It holds a Morningstar Bronze Medalist rating as of September 26, 20239. This rating highlights its solid risk-adjusted returns and investment strategy.
JEPI has delivered an average annual total return of 13.33% since starting9. This beats the S&P 500 Index, showing the fund’s power to offer steady income. JEPI also has lower volatility than the benchmark, with a standard deviation of 13.18 versus 21.00 for the S&P 5009.
Morningstar Bronze Medalist Rating
The Morningstar Bronze Medalist rating for JEPI reflects its strong performance and risk-adjusted returns. This praise from a respected research firm shows the fund’s skill in the market. It offers a great choice for investors looking for income.
Historical Returns and Volatility
Since starting, JEPI has given impressive returns, beating the broader market9. Its focus on a defensive equity portfolio and a disciplined options strategy helps it offer steady income with less volatility than the S&P 500 Index9.
JEPI’s Investment Process
The JPMorgan Equity Premium Income ETF (JEPI) has a special way to make sure investors get steady monthly income. It uses a mix of a defensive equity portfolio and a strict options overlay10.
Defensive Equity Portfolio Selection
JEPI picks stocks for its defensive equity portfolio by looking at U.S. large-cap stocks that are less volatile and have lower risk10. The goal is to offer market exposure but with less risk of losing money10.
Options Overlay for Income Generation
JEPI makes extra money by selling call options on the S&P 500 Index every week10. This strategy adds to the fund’s income, which comes from both the stock portfolio and the options10. The more volatile the market, the more money JEPI can make and grow its capital10.
JEPI combines a stable stock portfolio with a dynamic options strategy to make the most of the market’s upsides and increase income10. It aims to give investors steady income, less risk, and protection from market risks like credit or interest rate changes10.
JEPI stands out as a flexible way for investors to earn income while still being in the stock market10. Its mix of a defensive stock portfolio and options strategy promises a strong return with less market risk10.
JEPI’s Income Generation
The JPMorgan Equity Premium Income ETF (JEPI) uses a special strategy for steady income. It mixes dividends from its defensive stocks and extra income from options11.
JEPI picks stocks for safety and sells call options for more income11. This mix of dividends and options makes JEPI attractive with a high yield11.
JEPI has a strong 7.3% yield3 and a 12-month dividend yield of 8.5%3. It has a big asset base of almost $34 billion3.
JEPI has not done as well as the S&P 500 over three years3. But, its focus on steady income through a special strategy attracts investors11.
Over 20% of JEPI’s portfolio is limited by its ELN call options strategy3. This strategy balances income with protection11.
JEPI’s mix of dividends and options premium makes it a top pick for those wanting steady, diverse income11.
Consistent Monthly Income from JEPI
The JPMorgan Equity Premium Income ETF (JEPI) is great for those looking for regular income. It offers steady monthly dividends through a smart mix of defensive stocks and options trading12.
JEPI gets its income from dividends and the premiums from selling call options. This strategy gives investors a good yield. JEPI shows a 12-month dividend yield of 7.98% and a 30-day SEC yield of 6.98% as of the latest figures2.
JEPI has been paying consistent dividends every month since it started. Over the last year, it offered an 8.5% income yield to its investors13. This makes it a great choice for retirees, those needing extra income, or anyone wanting a passive income.
JEPI’s steady dividends show its strong investment strategy and the skills of its managers, Hamilton Reiner and Ralph Zingone. They pick stocks and trade options carefully. This helps JEPI offer good income with less market risk2.
For those wanting regular income, JEPI is a strong choice. Its steady dividends and good yield can add to an investor’s income sources. This can lead to a more stable financial future12213.
JEPI as an Income Diversifier
For those looking to diversify their income, the JPMorgan Equity Premium Income ETF (JEPI) is a great choice. It offers a unique way to earn income, different from traditional bonds. JEPI uses a strategy that involves selling call options on the S&P 500 index14. This approach aims to give investors equity exposure while keeping volatility low14.
Lower Equity Risk than Broad Market
JEPI stands out for its lower risk compared to the overall stock market. Its strategy of using options helps reduce the impact of market ups and downs. This makes it a good choice for those wanting to protect their investments15.
JEPI has done well, with a 3.4% return this year. This is better than many other ETFs focused on dividends, which lost about 3%15.
Other ETFs, like Vanguard Dividend Appreciation ETF (VIG) and iShares Select Dividend ETF (DVY), offer lower yields. JEPI’s yield of 9.79% makes it an attractive choice for those seeking regular income15.
ETFs like Global X NASDAQ 100 Covered Call ETF (QYLD), Nationwide Nasdaq-100 Risk-Managed Income ETF (NUSI), and Global X S&P 500 Covered Call & Growth ETF (XYLG) have also shown strong performance. Yet, JEPI’s steady return of 3.4% with $25.4 billion in assets under management shows its consistency and lower volatility15.
For those wanting to spread out their income sources and lower risk, JEPI is a smart pick14. It combines a lower risk profile with attractive dividends. This can help investors meet their income goals and make their portfolios more stable14.
“JEPI can serve as an effective income diversifier, offering a distinct source of monthly income with lower equity risk than the broader market.”
JEPI’s Potential as a Passive Income Machine
Investing in the JPMorgan Equity Premium Income ETF (JEPI) could make about $500 a month into around $42,650 a year in passive income7. This is if JEPI keeps its average annual return at 6.98%, like its current SEC yield, and its dividend yield stays at 6.98% for 30 years7.
JEPI’s high-yield and monthly income make it a great choice for those looking for steady passive income7. The fund has a 12-month rolling dividend yield of 8.5% and an annual expense ratio of just 0.35%7. This could help increase the potential for passive income.
Turning $500 per Month into $42,650 in Annual Passive Income
With an average annual return of 6.98% (JEPI’s current 30-day SEC yield)7, investing $500 a month for 30 years could grow the portfolio to over $611,1087. This would mean an annual income of about $42,6557. JEPI shows great potential as a passive income source for long-term investors.
“Investing in JEPI offers the potential for passive income generation for investors who plan ahead.”
JEPI’s long-term performance might not always match its current yields. But, its diversified portfolio and strategy aim to give investors a steady income7. By using JEPI’s high-yield and monthly distributions, investors could build a big passive income over time.
JEPI’s special investment approach and focus on steady income make it a strong choice for investors wanting a passive income machine7. By putting part of their portfolio in JEPI, investors might turn $500 a month into a big annual passive income7.
Considerations for Investing in JEPI
The JPMorgan Equity Premium Income ETF (JEPI) offers a high yield and potential for consistent monthly income. However, there are important things to think about before investing16.
Assumptions and Caveats
Assumptions about JEPI’s potential income might not last over time16. There’s also a risk the ETF could be shut down by the company16. And, the impact of inflation on the income’s real value should be considered.
JEPI’s strategy of writing call options might limit its upside in a fast-rising market16. With just over two years of history, its performance may not show how it will do in different markets16.
JEPI is not a traditional ETF but an equity-linked note with extra risks16. Its performance can differ a lot from major market indices, as seen in its trailing one-year performance16.
When comparing JEPI to other covered-call ETFs like QYLD and RYLD, note the differences in risk and performance16. JEPI might do well in slow markets but could miss big gains in bull markets due to its options strategy16.
JEPI’s high yield and income potential are tempting. But, investors should look closely at the fund’s risks and performance before deciding if it fits their investment goals and risk level16.
| Metric | JEPI | JEPQ |
|---|---|---|
| Inception Date | 202017 | 202217 |
| Number of Holdings | 13317 | 8817 |
| Expense Ratio | 0.35%17 | 0.35%17 |
| 1-Year Performance (Quarterly Returns at NAV) | 15.41%17 | 27.44%17 |
| Dividend Yield (2023) | 10.86%17 | 11.28%17 |
Investors put over $26 billion into covered-call funds in the last year, with a lot going to JEPI18. JEPI’s 12-month yield was 11.7% at the end of 2022, much higher than the S&P 500’s 1.7%18. But, the way JEPI and similar funds are structured can affect taxes, with 40% of gains taxed at short-term rates and 60% at long-term rates18.
“JEPI’s equity portfolio has generally fulfilled its defensive claim in major downturns.”18
In conclusion, JEPI’s high yield and income potential are appealing. But, investors should think carefully about the fund’s risks and how it performs before investing. The fund’s unique structure and strategy might not be right for everyone, and understanding the potential tradeoffs and tax effects is key161718.
Conclusion
The JPMorgan Equity Premium Income ETF (JEPI) is a top choice for those looking for a steady income. It has a defensive equity portfolio and a smart options strategy. This makes it a great way to add income to your investments19.
JEPI can turn a $500 monthly investment into $42,650 a year in passive income. This is thanks to its ability to handle market ups and downs1920. It’s perfect for investors wanting reliable income.
JEPI is a unique option for those focused on making money from their investments. It combines stocks and options to create a steady income stream. As markets change, JEPI remains a strong choice for building a diverse portfolio and earning passive income19.
FAQ
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Source Links
- 3 High-Yield Dividend ETFs to Buy to Generate Passive Income | The Motley Fool – https://www.fool.com/investing/2024/07/06/high-yield-dividend-etfs-buy-passive-income/
- PDF – https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/literature/fund-story/STO-JEPI.pdf
- JEPI Dividend: A Reliable Source of Passive Income? – https://learn.synvestable.com/jepi-dividend/
- Balance income, total return and risk with JEPI – https://am.jpmorgan.com/us/en/asset-management/adv/investment-strategies/etf-investing/investment-ideas/why-invest-in-equity-premium-income-etf-jepi/
- Investing in This High-Yield ETF Could Turn $500 Per Month Into $42,650 in Annual Passive Income | The Motley Fool – https://www.fool.com/investing/2024/05/07/investing-in-this-high-yield-etf-could-turn-500-pe/
- Is JEPI a Good Investment? An Overview of JEPI ETF – https://www.financialtechwiz.com/post/is-jepi-a-good-investment/
- Investing in This High-Yield ETF Could Turn $500 Per Month Into $42,650 in Annual Passive Income – https://www.nasdaq.com/articles/investing-in-this-high-yield-etf-could-turn-$500-per-month-into-$42650-in-annual-passive
- JPMorgan Equity Premium Income ETF (JEPI) Stock Price, News, Quote & History – Yahoo Finance – https://finance.yahoo.com/quote/JEPI/
- JPMorgan Equity Premium Income ETF – https://www.morningstar.com/etfs/arcx/jepi/quote
- Portfolio Q&A: JPMorgan Equity Premium Income ETF (JEPI) – https://am.jpmorgan.com/au/en/asset-management/adv/insights/investment-ideas/equity-income-ETF-QA/
- JPMorgan Equity Premium Income ETF (JEPI) Latest Stock News & Headlines – Yahoo Finance – https://finance.yahoo.com/quote/JEPI/news/
- JEPI ETF: Turn Your Tax Return Into Monthly Dividends – https://finance.yahoo.com/news/jepi-etf-turn-tax-return-204101650.html
- Got $1,000? This ETF Could Turn It Into an $85 Annual Passive Income Stream. | The Motley Fool – https://www.fool.com/investing/2024/04/29/got-1000-this-etf-could-turn-it-into-an-85-annual/
- Why I Keep Loading Up on These 2 Passive Income Machines | The Motley Fool – https://www.fool.com/investing/2024/05/22/why-i-keep-loading-up-on-these-2-passive-income-ma/
- MutualFunds.com – https://www.mutualfunds.com/active-etfs-channel/how-jepi-is-disrupting-equity-income-market-and-outperforming-passive-etfs/
- What’s wrong with this etf yielding 11% (JEPI)? [JPMorgan Equity Premium Income] – https://www.bogleheads.org/forum/viewtopic.php?t=385725
- JEPI vs JEPQ – Physician on FIRE – https://www.physicianonfire.com/jepi-vs-jepq/
- Should You Own a Covered-Call ETF Like JEPI? – https://www.morningstar.com/funds/should-you-own-covered-call-etf-like-jepi
- Why you shouldn’t buy SCHD or JEPI – https://www.mauldineconomics.com/dividend-digest/im-not-buying-schd-or-jepi…-and-you-probably-shouldnt-either
- FEPI ETF: This JEPI Alternative Could Yield Over 25% – https://www.nasdaq.com/articles/fepi-etf:-this-jepi-alternative-could-yield-over-25