JEPI vs. SCHD — ETF comparison tool (2024)

FAQs

How does JEPI compare to SCHD? ›

SCHD - Volatility Comparison. The current volatility for JPMorgan Equity Premium Income ETF (JEPI) is 1.77%, while Schwab US Dividend Equity ETF (SCHD) has a volatility of 3.68%. This indicates that JEPI experiences smaller price fluctuations and is considered to be less risky than SCHD based on this measure.

NYSEMKT: JEPI

If you start planning (and investing) early enough, your chances of enjoying a comfortable retirement increase dramatically. The JPMorgan Equity Premium Income ETF (JEPI 0.55%) could be a great part of the financial planning for many people.

Therefore, the premiums on these option contracts, as well as any other income you earn, will most likely be taxed at ordinary income rates, depending on your country. This makes JEPI unsuitable for investors who wish to reinvest these dividends manually, as the growth may be negatively affected by tax.

The Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) and the Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) are two popular dividend ETFs from leading asset managers. With a dividend yield of 4.5%, SPHD's yield is higher than SCHD's dividend yield of 3.5%.

Is JEPI a Good Investment? JEPI can be a good investment for more experienced, risk-averse investors who are looking for an ETF that can provide low-volatility, stocklike returns with superior yields. However, JEPI may not be for beginners or long-term investors.

Schwab U.S. Dividend Equity ETF (SCHD)

By focusing on dividend-paying stocks, SCHD provides a more consistent income stream than VOO. This can be a major advantage for retirees who need regular income to cover their living expenses.

Investors with a lower risk tolerance who prefer a more diversified ETF and still want to receive a high yield compared to the S&P 500 index or total market ETFs should choose JEPI.

JEPI is a conservative equity solution comprised of two fundamental building blocks: a defensive equity portfolio of U.S. large cap stocks and a disciplined options overlay.

JEPI is, after all, a covered call strategy and those tend to underperform during bullish conditions. 2023 saw a reversal and JEPI underperformed the S&P 500 by 16%. On top of that, the fund's yield, which had been a big selling point, has dropped down to 7.5%.

Why is JEPI so popular? ›

JEPI produces high income

The psychological "kick" from seeing a big dividend payment hit an account can be exhilarating. This appeal becomes more alluring for those investing in a tax-deferred or exempt account like a Roth IRA, or for those looking for steady monthly income to fund withdrawals.

JEPI - Volatility Comparison. The current volatility for Global X NASDAQ 100 Covered Call ETF (QYLD) is 1.29%, while JPMorgan Equity Premium Income ETF (JEPI) has a volatility of 1.70%. This indicates that QYLD experiences smaller price fluctuations and is considered to be less risky than JEPI based on this measure.

Disclosure: JEPI RISK SUMMARY: The price of equity securities may fluctuate rapidly or unpredictably due to factors affecting individual companies, as well as changes in economic or political conditions. These price movements may result in loss of your investment.

JEPI ETF's 12% dividend yield is supported by dividends and options premium income, with management aiming for 5% to 8% yield and 6% to 8% annual returns at 35% less volatility than the S&P 500, making it a potentially sustainable retirement income strategy when placed in tax-advantaged accounts.