Latest news with #JPMorganEquityPremiumIncomeETF
Yahoo
29-07-2025
- Business
- Yahoo
U.S. covered call funds attract record inflows as investors seek yield
By Patturaja Murugaboopathy (Reuters) -U.S. covered call funds are drawing robust inflows this year as investors search for higher returns and protection from broader market volatility because of continued tariff risks and geopolitical tensions. According to Morningstar data, U.S. derivative income funds, primarily made up of covered call strategies, attracted a record $31.5 billion in the first half of this year. Till the middle of this month, they secured another $2.5 billion, lifting the total net assets to a record $145 billion, the data showed. Covered call funds generate income by owning stocks and selling call options on them, collecting premiums in return. In choppy markets, like the current one clouded by macroeconomic uncertainty, these options often expire unused, allowing the fund to retain the premium as stock prices typically don't rise enough to trigger a sale. While gains are capped if markets rise sharply, the consistent income stream remains appealing. The JPMorgan Equity Premium Income ETF has offered a 12-month trailing yield of 8.25%, while the JPMorgan Nasdaq Equity Premium Income ETF and the Global X Nasdaq 100 Covered Call ETF yielded 11.5% and 13.9%, respectively, well above the 10-year U.S. Treasury yield of 4.4%. Chad Harmer, founder and chief investment officer of Harmer Wealth Management, said covered call funds have also become more accessible through low-fee ETFs and 401(k) plans. A 401(k) is a U.S. workplace retirement plan that lets individuals invest pre-tax income and continue managing those assets into retirement. The biggest demand is coming from retirees and conservative allocators, as these funds on average pay more than bonds and rise on concerns that broader equity markets may struggle to keep recent gains. "We believe that the substantial rally in recent weeks has already priced in a lot of potential good news, and that investors should prepare for potential market volatility in the weeks ahead,' said Mark Haefele, chief investment officer at UBS Global Wealth Management. Barry Martin, portfolio manager at Shelton Capital Management, said investors are embracing covered call funds not just for cash flow generation, but also to manage portfolio volatility. "It's a powerful shift in how we approach yield and risk management. This year, with the increased volatility, it is especially a good market to sell calls in." (Reporting By Patturaja Murugaboopathy in Bengaluru; editing by Shankar Ramakrishnan and Jan Harvey) 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
Reuters
29-07-2025
- Business
- Reuters
U.S. covered call funds attract record inflows as investors seek yield
July 29 (Reuters) - U.S. covered call funds are drawing robust inflows this year as investors search for higher returns and protection from broader market volatility because of continued tariff risks and geopolitical tensions. According to Morningstar data, U.S. derivative income funds, primarily made up of covered call strategies, attracted a record $31.5 billion in the first half of this year. Till the middle of this month, they secured another $2.5 billion, lifting the total net assets to a record $145 billion, the data showed. Covered call funds generate income by owning stocks and selling call options on them, collecting premiums in return. In choppy markets, like the current one clouded by macroeconomic uncertainty, these options often expire unused, allowing the fund to retain the premium as stock prices typically don't rise enough to trigger a sale. While gains are capped if markets rise sharply, the consistent income stream remains appealing. The JPMorgan Equity Premium Income ETF has offered a 12-month trailing yield of 8.25%, while the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ.O), opens new tab and the Global X Nasdaq 100 Covered Call ETF (QYLD.O), opens new tab yielded 11.5% and 13.9%, respectively, well above the 10-year U.S. Treasury yield of 4.4%. Chad Harmer, founder and chief investment officer of Harmer Wealth Management, said covered call funds have also become more accessible through low-fee ETFs and 401(k) plans. A 401(k) is a U.S. workplace retirement plan that lets individuals invest pre-tax income and continue managing those assets into retirement. The biggest demand is coming from retirees and conservative allocators, as these funds on average pay more than bonds and rise on concerns that broader equity markets may struggle to keep recent gains. "We believe that the substantial rally in recent weeks has already priced in a lot of potential good news, and that investors should prepare for potential market volatility in the weeks ahead,' said Mark Haefele, chief investment officer at UBS Global Wealth Management. Barry Martin, portfolio manager at Shelton Capital Management, said investors are embracing covered call funds not just for cash flow generation, but also to manage portfolio volatility. "It's a powerful shift in how we approach yield and risk management. This year, with the increased volatility, it is especially a good market to sell calls in."
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
14-06-2025
- Business
- Yahoo
I'm Seeking High-Yield Investments -- Can You Recommend Durable Stocks or ETFs That Yield 8% or More?
Ares Capital is an outstanding business development company with an ultra-high dividend yield. The JPMorgan Equity Premium Income ETF boosts its income by writing call options on the S&P 500. The Alerian MLP ETF owns high-yield master limited partnership (MLP) stocks. 10 stocks we like better than Ares Capital › As always, The Motley Fool cannot and does not provide personalized investing or financial advice. This information is for informational and educational purposes only and is not a substitute for professional financial advice. Always seek the guidance of a qualified financial advisor for any questions regarding your personal financial situation. If you'd like to submit your question for feedback, you can do so here. Go big or go home: That's a common mentality in business and sports. It's also a mindset shared by some income investors. A recent Reddit user asked about durable stocks or exchange-traded funds (ETFs) that offer dividend yields of 8% or more. That's a lofty threshold that eliminates many great dividend stocks and funds from contention. However, I can think of three ideas that income investors wanting ultra-high yields might consider. Looking for high yield 8%+byu/PomegranatePlus6526 individends Ares Capital (NASDAQ: ARCC) pays an exceptionally juicy forward dividend yield of 8.59%. What's more, the company has either maintained or grown its dividend for 63 consecutive quarters (nearly 16 years). How can Ares Capital pay such great dividends? First, it's a business development company (BDC). BDCs are required to return at least 90% of profits to shareholders as dividends to be exempt from federal income taxes. Second, Ares Capital is a truly extraordinary BDC. The company ranks as the largest publicly traded BDC. It has delivered the highest regular dividend growth of any externally managed BDC with a market cap of over $800 million that's traded publicly for the last 10 years. Ares Capital has generated the highest net asset value per share growth among this group. And it's provided the highest stock-based total returns among its peers, too. Middle-market businesses with annual revenue of between $10 million and $1 billion have been increasingly turning to BDCs for raising capital in recent years. This trend seems likely to continue. I think Ares Capital will be one of the biggest beneficiaries as the private capital market grows. If you want turbocharged income, the JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI) could be right up your alley. This ETF pays a mouthwatering 30-day SEC yield of 11.38%. The SEC yield, by the way, is the net investment income earned over a 30-day period on an annualized basis. As you can guess from its name, this ETF is managed by JPMorgan Chase. The fund invests in stocks based on fundamental research. It boosts income by writing out-of-the-money call options on the S&P 500 (SNPINDEX: ^GSPC). The JPMorgan Equity Premium Income ETF currently owns 126 stocks. Its holdings include top-tier names such as Visa, Mastercard, Meta Platforms, Microsoft, and Amazon. This ETF has only been available since May 2020, so some investors might be skeptical about its durability. However, its portfolio managers have between 10 and 38 years in the financial services industry. Morningstar awarded the fund four out of five stars. I think the JPMorgan Equity Premium Income ETF could be a great pick for income investors. The Alerian MLP ETF (NYSEMKT: AMLP) is another good pick for investors seeking high income. This ETF's yield of 8.03% barely tops 8%, but it still clears the bar right now. Over the last 12 months, the fund's yield was 7.94%. This ETF is managed by SS&C ALPS Advisors, an investment company that focuses on income and alternative growth strategies. The Alerian MLP ETF attempts to track the Alerian MLP Infrastructure Index, which invests in energy infrastructure master limited partnerships (MLPs). The fund currently owns positions in 13 stocks. Its top holdings include MPLX LP, Energy Transfer LP, Enterprise Products Partners, Western Midstream Partners LP, and Sunoco LP. These five stocks together make up nearly 60% of the ETF's total portfolio. One downside with this ETF is its relatively high annual expense ratio of 0.85%. However, a positive with investing in the Alerian MLP ETF versus directly buying the MLP stocks it owns is that you can avoid the tax hassles associated with investing in MLPs. Before you buy stock in Ares Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ares Capital 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 $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Ares Capital, Energy Transfer, Enterprise Products Partners, Mastercard, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Amazon, JPMorgan Chase, Mastercard, Meta Platforms, Microsoft, and Visa. The Motley Fool recommends Enterprise Products Partners and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. I'm Seeking High-Yield Investments -- Can You Recommend Durable Stocks or ETFs That Yield 8% or More? was originally published by The Motley Fool
Yahoo
10-06-2025
- Business
- Yahoo
Portfolio Construction Has Never Been This Hard: Reiner
JPMorgan Investment Management head of US equity derivatives, Hamilton Reiner, says portfolio construction has become difficult in the current market. The JPMorgan Equity Premium Income ETF (ticker: JEPI) is the largest active ETF by assets. Reiner speaks with Scarlet Fu, Katie Greifeld, and Eric Balchunas on "Bloomberg ETF IQ."
