Is JEPI a bad investment? (2024)

Is JEPI a bad investment?

JEPI is considered to be a safe investment but still quite complex, so it is better to understand how it works before buying. Is JEPI a good buy? YES, JEPI is a good buy for dividend seekers that can't afford too much volatility and prefer an actively managed portfolio.

Why is JEPI not good?

Summary. JEPI is not a bad ETF, but it and its peer group (covered call ETFs) are overrated by investors. And the cracks are starting to show. Extended down markets that don't immediately get back up are a risk to these ETFs not fully understood by many investors.

Is JEPI good long term?

Is JEPI a Good Investment? JEPI can be a good investment for more experienced, risk-averse investors who are looking for an ETF that can provide low-volatility, stocklike returns with superior yields. However, JEPI may not be for beginners or long-term investors.

How will JEPI perform in recession?

JEPI's blue-chip stock portfolio should see below-average losses during downturns and recessions, as was the case in 2022. Lower tech exposure also helped.

Is JEPI overvalued?

The JEPI fund's portfolio includes overvalued stocks despite the defensive intent of the ETF. JEPI offers a high dividend yield but has seen shrinking dividend payouts and lacks stability in its monthly income due to the call option strategy.

What is the downside of JEPI?

Therefore, the premiums on these option contracts, as well as any other income you earn, will most likely be taxed at ordinary income rates, depending on your country. This makes JEPI unsuitable for investors who wish to reinvest these dividends manually, as the growth may be negatively affected by tax.

Is JEPI safe for retirement?

One reason why JEPI is not a great choice for retirees is that its 0.35% expense ratio is rather high compared to many other passive income funds. For example, SCHD's expense ratio is only 0.06%. While over a single year, 0.29% does not seem like very much, throughout a long period that amount can add up.

Is JEPI good in a bear market?

In a bear market, the fund will experience all of the downside of the underlying equity portfolio, but the high yield helps offset some of the losses. It's a bit of a narrow target to hit, but income investors appreciate these funds for their often much above average dividend yields and lower risk.

Is the JEPI dividend a buy or sell?

JEPI's 5-day moving average is 55.58, which suggests JEPI is a Sell. What is JEPI's 20-day moving average? JEPI 20-day moving average is 56.67, which suggests JEPI is a Sell.

Is SCHD better than JEPI?

SCHD - Performance Comparison. In the year-to-date period, JEPI achieves a 3.43% return, which is significantly higher than SCHD's 2.25% return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.

Could JEPI be the best investment?

Summary. JEPI is one of the best run-covered call ETFs I've ever seen. It's designed for 6.5% monthly yield, 8% returns, and 35% lower volatility than the market. JEPI has benefited from increased volatility and from its low volatility blue-chip portfolio consisting of the world's best companies.

Is JEPI a good hedge?

Summary. JEPI's focus on low beta stocks make it a good bet on red years but causes it to underperform during green years as the fund's total beta is 0.5. Dividends are tied to the volatility levels of the market which means you are likely to see lower distributions when market is heading higher.

Is JEPI good during a recession?

While the fear of recession is turning investors risk-averse, JEPI, with its focus on high-conviction stocks, low volatility, and stellar yield, appears attractive. Per the recommendations of 1,721 analysts, the 12-month average JPMorgan Equity Premium Income ETF price target of $61.05 implies 11.57% upside potential.

What is better than JEPI?

In 2023, SPYI generated total returns of 18.13% and price returns of 4.69%. JEPI's total returns were 9.81% with price returns of 0.90% over the same period. SPYI remains a consistent outperformer within the category and has a management fee of 0.68%.

Is JEPI good for a Roth IRA?

To unlock greater income potential in a Roth IRA, investors can opt for a derivative income fund such as JEPI, which uses more complex options selling strategies to produce higher-than-average yields.

Why is the JEPI dividend dropping?

During the high volatility period between 2020 - 2022, we saw the yield reach as high as 13%. Now that markets are not as volatile, the yield has come down to about 8.4%, where the fund originally aimed to have the yield. I think the dividend here is best utilized by the retired investor.

Is JEPI taxed as income?

JEPI may be tax-inefficient, as distributions from the fund may be taxed as income, and dividends from underlying stock holdings are not considered qualified because of the offsetting options positions. JEPI isn't eligible for Tax-Loss Harvesting, since we can't find a viable alternate fund.

What is the best dividend ETF?

Is JEPI better than spy?

SPY - Performance Comparison. In the year-to-date period, JEPI achieves a 2.59% return, which is significantly lower than SPY's 5.42% return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.

What is the best ETF for retirees?

What is the best income ETF?

How often does JEPI pay out?

JEPI Dividend Information

JEPI has a dividend yield of 7.69% and paid $4.26 per share in the past year. The dividend is paid every month and the last ex-dividend date was Apr 1, 2024.

Why is JEPI so popular?

JEPI produces high income

The psychological "kick" from seeing a big dividend payment hit an account can be exhilarating. This appeal becomes more alluring for those investing in a tax-deferred or exempt account like a Roth IRA, or for those looking for steady monthly income to fund withdrawals.

Are JEPI and JEPQ good investments?

My Thoughts: JEPI vs JEPQ

These funds could be good options to add to your portfolio if you're looking to prioritize dividend cash flow and minimize volatility in your portfolio. The big difference between the two funds is that JEPI is focused on the S&P 500 index. While JEPQ is focused on the NASDAQ 100 index.

Is JEPI good in a bull market?

JEPI will perform well in bear markets but may lack in bull markets due to its capped upside potential. Investors must also note that the dividends are not qualified, meaning you pay higher taxes than dividend ETFs like SCHD.