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JEPI – A Compelling High Yield ETF for Monthly Income

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Investors seeking monthly income and a high yield could consider investing in the JPMorgan Equity Premium Income ETF. The ETF reduces gives exposure to high-conviction stocks.

Dividends are a great source of monthly income. However, with so many companies offering monthly payouts, it’s challenging to identify the best one. Further, relying on one or two stocks could be risky. That’s where dividend-focused ETFs (Exchange-Traded funds) can help. ETFs help investors own a portfolio of stocks for the purpose of generating income. One of the compelling dividend-focused ETFs is the JPMorgan Equity Premium Income ETF (JEPI). 

Why Invest in JEPI?

JEPI seeks to generate monthly income with less volatility. The dividend-focused fund generates income through selling options and investing in large-cap U.S. stocks. With the help of TipRanks’ Stock Comparison tool, here is a summary of the top 5 holdings of JEPI as of February 1.

By sector, Financials account for 12.9% of the total holdings. Meanwhile, industrials, healthcare, and consumer staples account for 12.7%, 11.9%, and 11.3%, respectively. 

What stands out is its stellar dividend yield. JEPI offers an attractive 12-month rolling dividend (or trailing 12-month) yield of about 11.46% (as of February 2). This also compares favorably to other asset classes, including the U.S. 10-year bond and REITs. Moreover, its expense ratio of 0.35% is competitive with peers. Further, it has a low beta of 0.65.

Bottom Line: Is JEPI Good for Retirees?

While the fear of recession could keep stocks volatile, JEPI, with a fund asset value of $20.12 billion, focuses on high-conviction stocks to generate monthly income. The high yield, low volatility, and monthly payouts make JEPI an attractive ETF for retirees. 

On TipRanks, JPMorgan Equity Premium Income ETF carries a Neutral Smart Score of seven.

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