JEPQ ETF

Dividend payouts play a central role for both JEPQ and JEPI and their potential return. Currently, JEPQ yields higher than JEPI, which is what I would expect. What caught my attention is that JEPQ also yields higher than its own historical average (by 9%) while JEPI yields 17% lower than its historical average.

JEPQ underperforms by almost 3% annually due to its income-chasing strategy, which detracts from the total return. Dividends and specialty income do not enhance retirement income or mitigate the sequence of returns risk; total return and risk level are paramount. Covered call strategies, like those in the Global X NASDAQ 100 Covered Call ETF, drastically reduce returns, robbing future gains for present income.

JEPQ has more favorable sectoral exposures in a growing risk-on mood for 2025. When rates are increasingly pointing more toward a risk-on mood, JEPQ vs SPY overweights to growth areas in technology and semiconductors are favorable. And JEPQ's underweights to banks vs SPY help avoid NIM compression headwinds as rates fall.

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) offers a strong yield and upside potential, making it attractive for income and total return investors. JEPQ's strategy of selling covered calls on tech stocks like Apple generates significant cash flow, enabling high dividend yields. Compared to other covered call ETFs, JEPQ has delivered solid price appreciation and outperformed due to less aggressive call writing and fundamental analysis.

Exchange-traded funds (ETFs) are great additions to any portfolio. I use them to gain exposure to market segments where I don't have a lot of expertise or where it's easier to invest in an ETF than to actively manage that part of my portfolio.

JEPQ has underperformed the Nasdaq 100 over the past two years. However, I think it is a good candidate to outperform in 2025. I detail why it will likely beat the Nasdaq 100 in 2025.

I believe the S&P 500 can reach 7,100 by year-end, driven by Fed rate cuts and potential declines in oil prices. JEPQ is my top pick for a hybrid investment, offering both income and capital appreciation, outperforming peers with a 24.53% total return in 2024. Despite risks tied to its concentrated holdings in the Magnificent Seven, JEPQ's strategy is well-positioned for 2025, benefiting from lower interest rates and pro-growth policies.

QDVO and JEPQ are both rated as Buys; QDVO is expected to outperform long-term, but JEPQ offers higher income at around 10%. QDVO's active management and tactical covered call strategy offer potential for higher returns as a large portion of its portfolio is uncapped. QDVO's 95% ROC distributions make it more tax-efficient for taxable accounts compared to JEPQ's ordinary income distributions.

Dividend investing has a lot going for it. However, most dividend ETFs and dividend portfolios are missing an important component. This article offers some high-yielding solutions to fill that void.