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Yahoo
3 days ago
- Business
- Yahoo
High Yield and Low Stress: 2 Dividend ETFs That Are Built for Passive Income
Key Points Statistical evidence supports the idea that these two ETFs can simultaneously grow capital and generate income. Maximum monthly drawdowns are less than the benchmark's performance, and so is the risk as defined by standard deviation. These ETFs do relatively best when benchmark indexes are highly volatile but still make money in bull markets. 10 stocks we like better than JPMorgan Equity Premium Income ETF › The JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI) and JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ) have garnered significant investor attention, in part due to their trailing-12-month dividend yields of 8.2% and 11.2%, respectively. Moreover, they offer monthly income, making them a favorite among passive income investors. As such, it would be interesting to share some modeling of their performance to see if they do offer investors a way to a relatively low-volatility strategy that practically guarantees a monthly income. (Keep in mind dividends can always be cut.) Introducing two JPMorgan ETFs The first thing to understand about these two exchange-traded funds is that they are not tailored to invest in dividend stocks. Instead, they both follow the same strategy of investing up to 80% of net assets in equities (stocks), with the only difference being that the Equity Premium ETF focuses on S&P 500 stocks while the Nasdaq Equity Premium ETF focuses on stocks in the Nasdaq-100. As noted above, the stocks are not explicitly selected for their dividend yield, an essential point because high-yield equity-focused ETFs often involve concentrating holdings in sectors with high yields. The remaining net assets, up to 20%, are invested in equity-linked notes (ELNs) that follow a strategy of selling call options on the indexes that the two ETFs benchmark -- S&P 500 and Nasdaq-100, respectively. A call option is the right to buy shares of the index at a specified price (the strike price) and is bought by bullish investors. The seller of the call options (in this case the ETF) receives a premium from the buyer. However, if the index increases significantly, the option is exercised, and the ELN typically incurs a loss. Conversely, when the index experiences a small gain, stays flat, or loses value, the option isn't exercised. The idea is that an anticipated net profit in premiums collected from the ELNs, combined with some dividend income from stock holdings, will generate sufficient income for distributions to be paid to shareholders under any condition, particularly in the event of a substantial increase in the index. And note that the upside is limited (gains less than the market), but the downside is also restricted. This table lays out how the portions of the ETFs will perform based on how the underlying index performs in a month. Monthly Index Performance Strong Gain Moderate Gain Moderate Loss Strong Loss Equities (At least 80% of the ETF assets) Strong Gain Gain Loss Strong Loss ELNs (Up to 20% of the ETF's assets) Loss Profit Profit Profit Overall Gain, but less than the market Gain, but less than the market Slight profit/slight loss Loss, but less than the market Author's analysis. What the ETFs need to do to demonstrate they work Before I throw charts at you, it's worth noting that the proof of the strategy working includes: The ETF should have a lower volatility than the index (measured here by the standard deviation of monthly returns). The ETFs should have relatively low maximum monthly drawdowns because passive investors usually do not want to lose a significant amount in any one month. The strategy should demonstrate a high coefficient of determination, or R^2, indicating that the independent variable (in this case, the benchmark index) is primarily responsible for determining the outcome. Performance consistent with the outcomes outlined in the table above. That said, here are the charts comparing the monthly index performance to the ETF's performance. Both sets of data include reinvestment of dividends. First, here's the JPMorgan Equity Premium Income ETF. And now the JPMorgan Nasdaq Equity Premium Income ETF. A few conclusions can be drawn from the data, along with some additional calculations. The monthly standard deviation of the S&P 500 over the period is 4.7%, compared to 3.1% for JEPI, indicating lower volatility returns. The monthly standard deviation of the Nasdaq-100 over the period is 5.7%, compared to 4.2% for JEPQ, indicating lower volatility returns. Both ETFs exhibit high R^2 values, indicating a consistency of outcome from the strategy. The three most significant monthly drawdowns for JEPI are -6.4%, -4.2%, and -4.1%. The three most significant monthly drawdowns for JEPQ are -8.7%, -6.8%, and -6.6%. In general, the strategy is effective, generating a collection of positive returns when the indices report moderate gains and losses. The downside is limited compared to the index when the market declines significantly, and the upside is limited when the indexes perform well. What it means to passive investors Both indices have performed very well over the periods, with an average monthly gain of 1.5% on the S&P 500 and 1.8% on the Nasdaq; therefore, the ETFs have understandably underperformed. However, there's no guarantee that these conditions will continue, and these ETFs have demonstrated lower volatility returns while maintaining substantial dividends for those seeking monthly income. As such, they are excellent options for those seeking to generate passive income across a range of market conditions. Should you invest $1,000 in JPMorgan Equity Premium Income ETF right now? Before you buy stock in JPMorgan Equity Premium Income ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and JPMorgan Equity Premium Income ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy. High Yield and Low Stress: 2 Dividend ETFs That Are Built for Passive Income was originally published by The Motley Fool
Yahoo
3 days ago
- Business
- Yahoo
High Yield and Low Stress: 2 Dividend ETFs That Are Built for Passive Income
Key Points Statistical evidence supports the idea that these two ETFs can simultaneously grow capital and generate income. Maximum monthly drawdowns are less than the benchmark's performance, and so is the risk as defined by standard deviation. These ETFs do relatively best when benchmark indexes are highly volatile but still make money in bull markets. 10 stocks we like better than JPMorgan Equity Premium Income ETF › The JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI) and JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ) have garnered significant investor attention, in part due to their trailing-12-month dividend yields of 8.2% and 11.2%, respectively. Moreover, they offer monthly income, making them a favorite among passive income investors. As such, it would be interesting to share some modeling of their performance to see if they do offer investors a way to a relatively low-volatility strategy that practically guarantees a monthly income. (Keep in mind dividends can always be cut.) Introducing two JPMorgan ETFs The first thing to understand about these two exchange-traded funds is that they are not tailored to invest in dividend stocks. Instead, they both follow the same strategy of investing up to 80% of net assets in equities (stocks), with the only difference being that the Equity Premium ETF focuses on S&P 500 stocks while the Nasdaq Equity Premium ETF focuses on stocks in the Nasdaq-100. As noted above, the stocks are not explicitly selected for their dividend yield, an essential point because high-yield equity-focused ETFs often involve concentrating holdings in sectors with high yields. The remaining net assets, up to 20%, are invested in equity-linked notes (ELNs) that follow a strategy of selling call options on the indexes that the two ETFs benchmark -- S&P 500 and Nasdaq-100, respectively. A call option is the right to buy shares of the index at a specified price (the strike price) and is bought by bullish investors. The seller of the call options (in this case the ETF) receives a premium from the buyer. However, if the index increases significantly, the option is exercised, and the ELN typically incurs a loss. Conversely, when the index experiences a small gain, stays flat, or loses value, the option isn't exercised. The idea is that an anticipated net profit in premiums collected from the ELNs, combined with some dividend income from stock holdings, will generate sufficient income for distributions to be paid to shareholders under any condition, particularly in the event of a substantial increase in the index. And note that the upside is limited (gains less than the market), but the downside is also restricted. This table lays out how the portions of the ETFs will perform based on how the underlying index performs in a month. Monthly Index Performance Strong Gain Moderate Gain Moderate Loss Strong Loss Equities (At least 80% of the ETF assets) Strong Gain Gain Loss Strong Loss ELNs (Up to 20% of the ETF's assets) Loss Profit Profit Profit Overall Gain, but less than the market Gain, but less than the market Slight profit/slight loss Loss, but less than the market Author's analysis. What the ETFs need to do to demonstrate they work Before I throw charts at you, it's worth noting that the proof of the strategy working includes: The ETF should have a lower volatility than the index (measured here by the standard deviation of monthly returns). The ETFs should have relatively low maximum monthly drawdowns because passive investors usually do not want to lose a significant amount in any one month. The strategy should demonstrate a high coefficient of determination, or R^2, indicating that the independent variable (in this case, the benchmark index) is primarily responsible for determining the outcome. Performance consistent with the outcomes outlined in the table above. That said, here are the charts comparing the monthly index performance to the ETF's performance. Both sets of data include reinvestment of dividends. First, here's the JPMorgan Equity Premium Income ETF. And now the JPMorgan Nasdaq Equity Premium Income ETF. A few conclusions can be drawn from the data, along with some additional calculations. The monthly standard deviation of the S&P 500 over the period is 4.7%, compared to 3.1% for JEPI, indicating lower volatility returns. The monthly standard deviation of the Nasdaq-100 over the period is 5.7%, compared to 4.2% for JEPQ, indicating lower volatility returns. Both ETFs exhibit high R^2 values, indicating a consistency of outcome from the strategy. The three most significant monthly drawdowns for JEPI are -6.4%, -4.2%, and -4.1%. The three most significant monthly drawdowns for JEPQ are -8.7%, -6.8%, and -6.6%. In general, the strategy is effective, generating a collection of positive returns when the indices report moderate gains and losses. The downside is limited compared to the index when the market declines significantly, and the upside is limited when the indexes perform well. What it means to passive investors Both indices have performed very well over the periods, with an average monthly gain of 1.5% on the S&P 500 and 1.8% on the Nasdaq; therefore, the ETFs have understandably underperformed. However, there's no guarantee that these conditions will continue, and these ETFs have demonstrated lower volatility returns while maintaining substantial dividends for those seeking monthly income. As such, they are excellent options for those seeking to generate passive income across a range of market conditions. Should you invest $1,000 in JPMorgan Equity Premium Income ETF right now? Before you buy stock in JPMorgan Equity Premium Income ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and JPMorgan Equity Premium Income ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy. High Yield and Low Stress: 2 Dividend ETFs That Are Built for Passive Income was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-07-2025
- Business
- Yahoo
JPMorgan Q2 ETF Assets Surged 47% on Flows, Market Gains
JPMorgan Chase & Co. (JPM), the sixth-largest ETF issuer, said second-quarter exchange-traded fund assets jumped 47% from the same quarter last year as actively managed equity funds pulled in new money amid rising markets. ETF assets rose to $275.5 billion from $187.2 billion a year ago, the New York-based bank said in an email. They gained 15% from $239.9 billion at the end of the first quarter. The world's biggest bank by assets said its 140 ETFs have pulled in $34 billion so far this year, 16% better than the previous year and a $15 billion jump from the first quarter. The bank is focused on active ETFs, and the 91 it's issued pulled in nearly all—$33 billion—of year-to-date flows. JEPI vs. JEPQ Flows While JPMorgan is known for the $41.1 billion JPMorgan Equity Premium Income ETF (JEPI), its $28.3 billion JPMorgan NASDAQ Equity Premium Income ETF (JEPQ) pulled in twice the cash during the quarter, grabbing $3.7 billion to the former's $1.7 billion. Investors rushed into stocks during the second quarter, as the S&P 500 rose 11% to emerge from a brief bear market, with fears of a tariff-induced global slowdown and inflation easing. They poured $247.8 billion into ETFs, according to FactSet data reported by a 16% drop from the first quarter's $296 billion. 'The U.S. economy remained resilient in the quarter,' JPMorgan CEO Jamie Dimon said in last week's earnings statement. 'Significant risks persist—including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.' JPMorgan joins rivals, including BlackRock Inc. (BLK), Charles Schwab Corp. (SCHW), State Street Corp. (STT) and Invesco Ltd. (IVZ), in reporting that assets surged in their ETF businesses during the second quarter thanks to rising inflows and stock prices. JPMorgan also said it issued 17 new ETFs during the quarter, with 14 of them being active funds. JPMorgan ETF Assets, Flows & Products Metric Q2 2024 Q2 2025 Change ETF Assets Under Management $187.2B $275.5B +47% YTF Flows $29.3B $34B +16% YTD Product Launches 6 17 +11 ETF Products 115 140 +25 Source: & JPMorgan DataPermalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
Mint
17-06-2025
- Business
- Mint
New Buffett-inspired ETF holds Berkshire and Apple. It aims for 15% yield.
An income-oriented fund keyed off Warren Buffett's equity portfolio at Berkshire Hathaway has attracted nearly $250 million and has delivered a 15% distribution rate to investors since its inception in March. The VistaShares Target 15 Berkshire Select Income exchange-traded fund holds 21 stocks. It puts 10% of its assets in Berkshire's Class B shares, and invests in 20 stocks held in Berkshire's equity portfolio. It also uses an options strategy, mainly the writing of call options, to generate income. Its ticker symbol is OMAH, a reference to the Berkshire's headquarters in Omaha, Neb. 'Berkshire clearly has a broad investor base and Warren Buffett is the best investor ever," says VistaShares CEO Adam Patti. 'Berkshire doesn't pay a dividend on its stock. We felt there was an opportunity to mirror the holdings and provide a 15% target" annual yield. Distributions are paid monthly. The ETF, which finished Monday at $19.15, is one of many that use the sale, or writing, of call options to augment income. Probably the most prominent is the $40 billion JPMorgan Equity Premium Income ETF (JEPI), which has a current yield of 11%. Given the income orientation, the Berkshire ETF may be better suited to tax-free accounts such as IRAs and 401(k)s. The VistaShares Berkshire fund, like others that use call writing, limit their upside by selling the calls but the income can be substantial. 'Any income strategy will not keep up in an aggressive bull market" due options, Patti says. It should do best relative to a buy and hold strategy in a flattish market due to the option income. The option strategy won't protect investors in a downturn, but the income will offset any stock-price declines in a bear market. The Berkshire ETF is about flat based on its total return since its inception in early March. The Berkshire index of 21 stocks that it tracks has fallen about 4% and that has been offset by the income from the option strategy. It has produced income in line with its 15% annualized ETF rebalances quarterly with the most recent occurring in May. The largest four holdings as of Friday were Apple (10.2%), Berkshire B shares (9.8%), American Express (8.4%), and Coca-Cola (6.2%). Bigger Berkshire equity investments get a larger weighting in the ETF. The fund isn't for investors seeking significant capital gains on Berkshire's stocks. 'The No. 1 goal is to hit 15% and the second goal is to maximize capital appreciation," Patti says. 'We want as much upside as possible but not to the detriment of hitting the 15%." VistaShares also has filed for a group of new active-traded ETFs that will invest in the publicly disclosed holding of three other notable investors: Bill Ackman, Stan Druckenmiller, and Michael Burry. Those funds could hit the market by Labor Day, as well as a new Berkshire ETF that will invest in the same 21 stocks as the existing one but refrain from writing call options. The Ackman, Druckenmiller, and Burry-themed ETFs will come in two forms: a plain vanilla fund that will just hold their stocks and one using their stocks plus a call-writing strategy. Write to Andrew Bary at
Yahoo
10-06-2025
- Business
- Yahoo
Active ETFs Catch a Wave of Investor Interest
Rising fund inflows underscore a broader shift in investor preference toward actively managed ETFs. According to JPMorgan, over 39% of ETF flows in 2025 have been directed toward active strategies. Supporting this trend, 34% of ETF allocations in April went to active ETFs, per ETF Action, as quoted on Investopedia. This highlights a broader shift in investor preference, with investors increasingly moving away from passive ETFs in favor of active approaches. Let's take a closer look at the factors behind the rise of active ETFs. Per JPMorgan, of all the fund launches this year, active funds accounted for 94% of all ETF launches in 2025. Last month, 46 active ETFs were launched, injecting momentum into the industry. Deloitte's Center for Financial Services forecasts that U.S. active ETF assets under management (AUM) will soar from $856 billion in 2024 to $11 trillion by 2035, marking a 13-fold increase. By that time, active ETFs are expected to represent 27% of total ETF AUM. Per ETF Trends, continued innovation within ETFs is expected to sustain strong interest in active ETFs. Over the past year, inverse ETFs, leveraged ETFs and options-based ETFs have entered the market, expanding the options available to advisors and investors. As investors become more aware and performance data on active ETFs becomes more widely available and transparent, demand and fund inflows into these products are expected to accelerate. According to Deloitte, one of the most important factors driving the growth in actively managed funds is investors shifting away from mutual funds toward ETFs, induced by lower ETF expense ratios for comparable strategies. This year has been marked by volatility, which has created an environment suitable for active managers to exploit opportunities and potentially outperform the passive funds. Investors are turning bullish and becoming less sensitive to uncertainties caused by tariffs. According to YCharts, the percentage of investors who are bullish on the market has increased since late February. The adoption of active ETFs is expected to grow among both institutional and retail investors. Per Investopedia, the recent surge in active fund inflows is largely driven by retail investors, especially younger and more aggressive traders. Below, we highlight a few active funds for investors to consider. JPMorgan Equity Premium Income Fund employs a covered call strategy, selling call options on top of a stock portfolio to generate income in the form of option premiums. The fund has amassed an asset base of $39.79 billion and charges an annual fee of 0.35%. JEPI has a one-month average trading volume of about 5.05 million shares. JEPI generates income through a combination of selling options and investing in U.S. large-cap stocks. JPMorgan Equity Premium Income Fund has a dividend yield of 8.34%. JEPI has gained 1.74% over the past month and 6.74% over the past year. JPMorgan NASDAQ Equity Premium Income ETF employs a covered call strategy, selling call options on top of a stock portfolio to generate income in the form of option premiums. The fund has amassed an asset base of $26.44 billion and charges an annual fee of 0.35%. JEPQ has a one-month average trading volume of about 6.35 million shares. JEPQ generates income through a combination of selling options and investing in the tech-heavy Nasdaq-100. JPMorgan NASDAQ Equity Premium Income ETF has a dividend yield of 11.58%. JEPQ has gained 3.63% over the past month and 8.49% over the past year. iShares U.S. Equity Factor Rotation Active ETF seeks to outperform the investment results of the large and mid-capitalization U.S. equity markets by providing diversified and tactical exposure to style factors via a factor rotation model. The fund has amassed an asset base of $17.84 billion and charges an annual fee of 0.27%. DYNF has a one-month average trading volume of about 1.94 million shares. iShares U.S. Equity Factor Rotation Active ETF has a dividend yield of 0.88%. DYNF has gained 7.03% over the past month and 16.86% over the past year. Capital Group Dividend Value ETF seeks to produce consistent income that exceeds the average yield of the S&P 500 by focusing on companies that pay dividends or have the potential to pay dividends. The fund has amassed an asset base of $17.09 billion and charges an annual fee of 0.33%. CGDV has a one-month average trading volume of about 3.36 million shares. The fund has allocated about 78.5% of its assets to large-cap securities. Capital Group Dividend Value ETF has a dividend yield of 1.50%. The fund has gained 6.09% over the past month and 14.91% over the past year. Avantis U.S. Small Cap Value ETF seeks long-term capital appreciation by investing primarily in a diverse group of U.S. small-cap companies across market sectors and industry groups. The fund has amassed an asset base of $15.42 billion and charges an annual fee of 0.25%. AVUV has a one-month average trading volume of about 830,000 shares. Avantis U.S. Small Cap Value ETF has a dividend yield of 1.77%. The fund has gained 6.67% over the past month but has fallen 3.57% over the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares U.S. Equity Factor Rotation Active ETF (DYNF): ETF Research Reports Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports Capital Group Dividend Value ETF (CGDV): ETF Research Reports JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
