American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

JEPI ETF put to the ultimate test: is it beating VOO and SPY?

by admin April 9, 2025
April 9, 2025
JEPI ETF put to the ultimate test: is it beating VOO and SPY?

Popular boomer candy ETFs like the JPMorgan Equity Premium Income ETF (JEPI) are in the spotlight this year as the stock market goes through turmoil. Most stocks have crashed, with the S&P 500 index nearing a bear market, where an asset tumbles by 20% from a local top. This article explores why the JEP ETF is beating popular S&P 500 funds like SPY and VOO.

What is the JEP ETF?

JEPI is a popular exchange-traded fund that aims to provide regular dividend payouts to investors and expose them to quality blue-chip companies.

It uses a relatively simple approach that other covered call ETFs like JEPQ and SPYI have now emulated. 

The fund invests in a group of quality blue-chip companies like Apple, Microsoft, NVDIA, and JPMorgan. 

It then uses a portion of its assets to sell call options on the S&P 500 index. A call option is a trade that gives an investor a right, but not the obligation, to buy an asset at a certain time, popularly known as the expiry period. 

The expiry period is the period when an option ends, and the trade becomes worthless if not executed. When it does this, the fund receives a premium, which is the price that the buyer pays to the seller of the call option to acquire he contract. This premium is usually quoted per share. 

The JEPI ETF makes money in three main ways. First, it benefits when the underlying stocks rise. Second, it receives the premium payment, which it then distributes to its investors through a monthly dividend. Third, it receives the dividend payouts from the underlying companies.

JEPI’s structure means that it always pays a higher dividend than the S&P 500 index. With the stock now sharply lower, its dividend yield has jumped to 8.34%, which is a good number. This means its investors receive monthly payments to offset the ETF’s crash. 

Is JEPI ETF beating the VOO and SPY ETFs this year?

JEPI vs S&P 500 total return in 2025

Covered call ETFs have attracted scrutiny in Wall Street over the years. One argument is that they constantly underperform the benchmark indices like the S&P 500 and Nasdaq 100 indices over time. 

Historically, JEPI has always underperformed the S&P 500 index regarding its price return. It has crashed by over 17% in the last three years, while the VOO ETF has jumped by almost 11% in the same period.

However, the spread narrows a bit when you look at the total return, including the monthly dividend checks. In this case, the S&P 500 index has risen by 11%, while the JEPI fund has jumped by 7.8%. This performance is likely because the index was in a strong uptrend after the pandemic. 

JEPI and VOO ETFs have plunged this year because of Donald Trump’s trade war. It has dropped by 11.1%, while the VOO fund has dropped by 15%.

Therefore, this performance means that it makes sense for S&P 500 ETF investors also to allocate some cash to JEPI for its regular dividends. 

The post JEPI ETF put to the ultimate test: is it beating VOO and SPY? appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
US soybean market rattled as China strikes with fresh tariffs
next post
Lululemom stock faces a double whammy: $130 target in sight

Related Posts

Oil prices climb amid Middle East conflict fears,...

October 3, 2024

BSE Sensex, Nifty50 on October 28: Shriram Finance,...

October 28, 2024

Stephanie Link reveals her favourite retail stocks after...

May 18, 2025

Where to invest $10,000 right now for superior...

April 28, 2025

Temple University reviewing reports of potential match-fixing of...

March 9, 2024

71% of institutional traders plan to skip crypto...

February 6, 2025

Johnson & Johnson to pay $6.5 billion to...

May 6, 2024

Applebee’s owner plots turnaround to lure back fast-food...

May 11, 2024

Jeju Air crash tragedy: South Korea investigates aviation...

December 30, 2024

Disney CEO Bob Iger vanquishes billionaire foe Nelson...

April 5, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (2,982)
    • Investing (2,444)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved