JEPI vs JEPQ Our Pick
JPMorgan Equity Premium Income ETF vs JPMorgan Nasdaq Equity Premium Income ETF
Buy JEPI if…
- •You like stability of the covered call income
Buy JEPQ if…
- •You like performance of tech stocks, and the covered call approach
- •You're ok with higher taxes
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Covered Call Duo
JEPI and JEPQ are both JPMorgan ETFs that use covered call strategies to generate monthly income.
A covered call strategy is when you own a stock and then sell someone else the right to buy it from you at a specific price in the future. You collect a premium for selling that right, which generates extra income on top of any dividends. The trade-off is that if the stock absolutely rips higher, you cap your upside because you've already agreed to sell at that set price.
But JEPI and JEPQ are aimed at different types of investors.
JEPI is the more conservative play - it's diversified across multiple sectors (think stable names like Visa and PepsiCo) and currently yields around 8.79%. It's had a max drawdown of only about 13.7%, so it's relatively stable and perfect if you want steady income without too much drama.
JEPQ is the spicier version - it's focused on tech-heavy Nasdaq 100 stocks, which means names like Microsoft, Nvidia, and Apple. It pays a higher yield at around 10-11%, but you're taking on more volatility for that extra juice.
Surprisingly, JEPQ performs close to the S&P 500 Index, but the historical data is not long (since 2022), so the future will tell the difference.
These dividends are taxed as ordinary income at your marginal rate (up to 37%), not at capital gains rates (0–20%). If you're not exempt, the tax difference can be significant.
