JEPQ: If You Must Own A NASDAQ 100 Covered Call Fund, It Should Not Be This One

Gary Gambino 7.2K Followers Follow Summary JPMorgan Nasdaq Equity Premium Income ETF underperforms other NASDAQ 100 covered call ETFs with its use of ELNs, which lack transparency and tax efficiency. JEPQ's income is taxed at ordinary rates, with only 5.1% of distributions as qualified dividends, making it less tax-efficient than peers like GPIQ. JEPQ offers little downside protection in bear markets and consistently lags total return versus owning QQQ and selling shares for income. JPMorgan's new ROCQ ETF, using call spreads, is more transparent and tax efficient. It is showing early outperformance over JEPQ but has a limited track record. Woman checking her portfolio and wondering why she bought JEPQ instead of GPIQ or ROCQ laflor/iStock via Getty Images Different Index, Same Problems Around 5 weeks ago, I wrote about the negative aspects of the JPMorgan Equity Premium ETF This article was written by Gary Gambino 7.2K Followers Follow 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. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.