Jepi alternatives

This page contains links to our partners. RBD may be compensated when a link is clicked. Read disclosures. This article compares JEPI vs JEPQ — J.P. Morgan’s Equity Premium Income ETF vs. J.P. Morgan’s Nasdaq Equity Premium Income ETF. Both are actively managed ETFs popular with dividend investors and retirees looking to earn yields above total market ETFs such as VTI and popular dividend ETFs.The funds aim to seek current dividend income while maintaining the prospects for price appreciation.JEPI and JEPQ are covered call ETFs. The funds hold undervalued stocks in their respective benchmark indexes and sell covered calls (a basic and low-risk option strategy) against the benchmark indexes to generate income for investors via equity-linked notes (ELNs). It’s a bit confusing; we’ll dig in more below. The funds deploy a nearly identical strategy. The main difference between the funds is their benchmark indexes. JEPI holds stocks in Standard & Poor’s 500 Total Return Index (S&P 500 Index). JEPQ holds stocks in the Nasdaq-100 Index. Each fund pays a monthly dividend with annual yields (~10%+) significantly higher than broad index funds tied to the market indexes. Therefore, investors should consider owning JEPI and JEPQ in tax-advantaged accounts such as a traditional or Roth IRA to avoid dividend taxation. Table of ContentsBottom Line Upfront (BLUF)JEPI vs JEPQ ComparisonSide-by-SideBenchmark IndexesPerformance Chart (Excluding Dividends)Dividend Payout SchedulesTop Ten HoldingsWhat are Equity-Linked Notes?How do Covered Calls work in JEPI and JEPQ?Alternative FundsBest Broker to Buy JEPI or JEPQConclusionAdditional ResourcesBottom Line Upfront (BLUF)Before I get into the details of JEPI vs JEPQ, it’s essential to keep the following in mind:The funds deploy the same strategy. However, the benchmark indexes vary. Each fund holds many of the largest U.S. blue-chip companies.JEPI has a broader pool of stocks from which to choose. JEPQ is Nasdaq-only and has a high percentage of assets in the top 10 holdings (concentration risk). Covered call ETFs are a relatively new category. JEPI is older, more established, and has more assets under management than JEPQ. JEPQ has outperformed JEPI since JEPQ’s inception (see chart below for the latest). But both funds are immature. Past performance is not indicative of future returns.Both ETFs are available to purchase from any online broker. I prefer M1 Finance.JEPI and JEPQ are untested in severe bear markets. It is unclear how they will perform when stocks fall dramatically. Please note that both ETFs update their prospectuses regularly. The

For years, European investors have had to look with jealousy across the pond to access the popular JEPI ETF, which has garnered a loyal following for its consistent high-yield income stream. But now, the wait is (almost!) over. JP Morgan Asset Management has launched the JPM Global Equity Premium Income UCITS ETF (JEPG, JPGP or JGPI – depending on the currency), a European-listed equivalent of the US-based JEPI ETF, allowing European investors to reap all the benefits of this unique investment vehicle.JEPI etf’s popularity explainedThe US-based JEPI ETF has amassed over $30 billion in assets under management since its inception in 2020, and there are several reasons for its widespread appeal. Most importantly, I see the following 3 reasons:Consistent Income Stream: JEPI targets a distribution yield of 7-9% annually, paid monthly. This makes it an attractive option for investors seeking a monthly stream of income. There are not too many dividend stocks that offer a similar monthly income.Actively Managed Approach, yet Passive: there are quite some retail investors that use option selling as an additional form of income generation. However, this requires a lot of time and continuous focus to avoid unwanted portfolio impact. JEPI offers this additional income from call option selling via its ETF thus saving retail investors lots of time.Low Costs to Own: $JEPI charges a 0.35% expense-ratio fee to retail investors. This is relatively low for an actively management fund.What is the JEPG ETF about?According to JP Morgan, “JEPG provides investors access to a defensive equity portfolio which aims to provide a solution for income-seeking investors, while reducing total equity risk. The portfolio managers invest in a defensive equity portfolio which employs a time-tested, bottom-up, fundamental research process with stock selection based on our proprietary risk-adjusted stock rankings. A disciplined options overlay implemented by writing out-of-the-money MSCI World Index call options that seeks to enhance distributable monthly income.”In simple terms, this ETF invests in typical blue chip stocks and it writes call options for additional income. As of today (8-december-2023), its top 10 holdings are:Deutsche TelekomUnited Health GroupNippon TelegraphRoper TechnologiesPepsicoCisco SystemsMicrosoftMotorola SolutionsJohnson & JohnsonRoche HoldingTogether they make up 14% of the entire JEPG UCITS ETF.JEPG etf: The JEPI UCITS equivalent available to EuropeansAs you can see, the launch of the JEPG etf provides European investors with direct access to a similar strategy as JEPI. The main difference is that JEPG is investing in stocks around the

Favorite online broker for everyday investing. The platform is more intuitive than old-school brokers because it’s built on a modern technology platform.You create portfolio “pies” that contain all the stocks and ETFs you want to own and in what percentages. Simply add an ETF to a pie and add funds to your account. Learn More about M1 FinanceConclusionDeciding between JEPI vs JEPQ comes down to the investor’s risk tolerance for holdings concentration — including the total number of holdings and percentage allocation of the top 10 holdings. JEPQ has outperformed JEPI in the early stages, but these are relatively new funds untested in a bear market, which could introduce unexpected risk with market volatility. Conservative investors may not be comfortable with the lack of historical performance data.JEPQ has a greater concentration of risk exposure in the top 10 holdings, more than 40%. Holdings like Apple and Microsoft performed well and lifted the Nasdaq-100, thus increasing returns. JEPI is currently five times as large as JEPQ due to its age. If both funds continue to perform and have attractive yields, we expect the assets under management will continue to grow for both funds. Investors with a higher risk tolerance whose objectives require higher dividend yields and returns can choose JEPQ but are more vulnerable to concentration risk. Investors with a lower risk tolerance who prefer a more diversified ETF and still want to receive a high yield compared to the S&P 500 index or total market ETFs should choose JEPI. Own either fund in a tax-advantaged account like a traditional or Roth IRA to avoid dividend taxation. Purchase either ETF at any commission-free online broker. Please reply with your questions regarding JEPI vs JEPQ in the comments section below. Include any requests you have about adding more detail to this article. Additional ResourcesJEPI Dividend History and YieldJEPQ Dividend History and YieldJEPI vs. SCHDSCHD vs. VIGVYM vs. VIGDisclosure: The author is long VTI and SCHD but does not own JEPI or JEPQ. Craig is a former IT professional who left his 19-year career to be a full-time finance writer. A DIY investor since 1995, he started Retire Before Dad in 2013 as a creative outlet to share his investment portfolios. Craig studied Finance at Michigan State University and lives in Northern Virginia with his wife and three children. Read more.Favorite tools and investment services (Sponsored):Boldin — Spreadsheets are insufficient. Build financial confidence.

Information referenced in this article will change over time.The best resource for both funds is the respective company’s websites.Here are links to the most updated information at J.P. Morgan. Consider the information on those pages to be the authoritative data source.J.P. Morgan’s Equity Premium Income ETF (JEPI)J.P. Morgan’s Nasdaq Equity Premium Income ETF (JEPQ)JEPI vs JEPQ ComparisonSide-by-SideHere’s a side-by-side comparison of both ETFs. Scroll right on mobile.A few noticeable differences between JEPI vs JEPQ:JEPI is a larger fund by 5X and older by two years.Both expense ratios are low for actively managed ETFs — identical at the time of writing.JEPQ has a much higher percentage in the top 10 holdings, indicating it is less diversified.JEPQ has outperformed JEPI since over the latest one-year period. JEPQ is newer — launched in May 2022. Time will tell if JEPQ continues to outperform. JEPI has more holdings, but its holdings are a smaller fraction of its benchmark index holdings (500), whereas JEPQ holds a higher percentage of its benchmark holdings (100). Benchmark IndexesJEPI tracks the Standard & Poor’s 500 Total Return Index (S&P 500 Index), one of the most followed indexes in the world. Visit this page for the latest information about the weighted index.There are 500 stocks in the index, representing both the Nasdaq and New York Stock Exchange (NYSE). The companies are the largest and most established in the U.S.JEPQ tracks the Nasdaq-100 Index, a tech and growth-focused weighted index.Visit this page for the latest information about the index.The Nasdaq-100 Index is comprised of the “largest and most innovative non-financial companies listed on the Nasdaq Stock Market based on market capitalization”.The main differences between the funds are: The S&P 500 Index is larger and contains both NYSE and Nasdaq stocks.The S&P 500 Index includes stocks from all industries, including financials, industrials, energy, and utilities, excluded from or underrepresented in the Nasdaq-100.The Nasdaq-100 Index is tech-heavy and has outperformed the S&P 500 Index over the past 10 years. It only holds the top 100 Nasdaq-listed stocks as measured by market capitalization. Performance Chart (Excluding Dividends)The performance of these two funds has been tracked similarly for the past few years.Here is a daily updated JEPI vs JEPQ chart compared against each other since JEPQ’s inception date (05/04/2022). Scroll right on mobile.Note: This chart does not account for dividend payments. When a dividend is paid to shareholders, the security price is reduced by the