JEPQ vs VOO Our Pick
JPMorgan Nasdaq Equity Premium Income ETF vs Vanguard S&P 500 ETF
Buy JEPQ if…
- •You need substantial monthly income (10% vs 1%)
- •You're willing to cap upside for income stability
- •You believe tech will keep outperforming
Buy VOO if…
- •You want pure market exposure with minimal costs
- •Long-term growth is the priority over current income
- •You prefer simplicity and tax efficiency
- •You're comfortable reinvesting dividends yourself
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Income or Growth
JEPQ and VOO represent two fundamentally different investment philosophies—one optimized for monthly income, the other for pure market exposure and long-term growth.
The twist is that so far, they perform pretty closely, although the historical data is limited, so this may change in different market conditions.
JEPQ focuses on tech-heavy Nasdaq 100 stocks and pays out around a 10% yield with monthly distributions generated from selling covered calls. The expense ratio is 0.35%—higher than VOO’s, but reasonable for active management.
A covered call strategy involves owning a stock and then selling another investor the option to purchase it from you at a certain price in the future. You receive a premium for granting this option, which adds extra income on top of any dividends you earn. The catch is that if the stock surges much higher, your gains are limited since you've already agreed to sell at the predetermined price.
VOO is the classic index fund approach—it passively tracks the S&P 500 Index with a rock-bottom expense ratio of just 0.03%, meaning you pay only $3 per year for every $10,000 invested.
The key difference shows up in volatility and cash flow. JEPQ actually has slightly lower volatility (3.97%) compared to VOO (4.39%), thanks to the income cushion from selling calls. But here's the trade-off: when the market absolutely rips higher, JEPQ caps your upside because you've sold away some of those gains in exchange for the monthly income.
The correlation between them is 0.92, meaning they generally move together—and so far, they do.
Just remember that dividends are taxed at your marginal rate (up to 37%), not at capital gains rates (0–20%). If you're not exempt, the difference can be significant.
