JEPI: If You Must Own A Covered Call ETF, It Shouldn't Be This One

JPMorgan Equity Premium ETF has significantly underperformed both the S&P 500 and peer covered call ETFs since inception. JEPI’s portfolio is underweight high-performing sectors, particularly technology, and its synthetic covered call strategy via ELNs adds complexity and tracking error. Owning an index fund and selling shares for income has historically outperformed JEPI on both total income and ending portfolio value. JEPI’s structure offers little advantage in bull or bear markets, and its income is less tax-efficient due to ELN-derived ordinary income.

That Monthly Income Comes With A Cost It's been a little over a year since I wrote 2 articles on Covered Call ETFs, a popular investment.

I retired early after 22 years in the energy industry with roles in engineering, planning, and financial analysis. I have managed my own portfolio since 1998 and have met my goal to match the S+P 500 return over the long term with lower volatility and higher income. I mostly write on positions I already hold or am considering changing. I prefer to hold positions for the long-term unless there is a compelling reason to sell. I look for investment opportunities without regard to asset class, market cap, sector, or yield. I would rather maximize total return over time by buying when price is low relative to intrinsic value.