Investors seeking consistent premium income with lower volatility should look closely at the JPMorgan Equity Premium Income ETF delivers monthly distributable income and equity market exposure with less volatility. JEPI seeks to generate revenue by selling options on U.S. large-cap stocks. The fund invests in S&P 500 stocks that exhibit low-volatility and value characteristics and sells options on those stocks to generate additional income.
Managed by JPMorgan, JEPI's portfolio managers have over 60 years of combined experience investing in equities and equity derivatives. The defensive equity portfolio employs a time-tested, bottom-up fundamental research process with stock selection based on its proprietary risk-adjusted stock rankings. JEPI's disciplined options overlay involves writing out-of-the-money S&P 500 Index call options to generate distributable monthly income.
The fund generates income from its premiums by selling call options on its stocks. This strategy reduces the fund's overall volatility, generating income regardless of whether the stock price goes up or down.
The Large Cap Growth Fund, managed by JPMorgan, targets companies with large markets, sustainable competitive advantages and strong price momentum. It employs an experienced portfolio manager and five dedicated growth analysts with a style-pure large-cap growth strategy that uses a fundamental, bottom-up approach to identify companies with solid growth potential. This investment strategy is incorporated into JEPI's portfolio, as the fund seeks to provide exposure to the equity market with less volatility.
JEPI also considers environmental, social and governance (ESG) factors in investment analysis and decisions. This approach aligns with JPMorgan's goal of enhancing long-term, risk-adjusted financial returns by evaluating companies' sustainability and ethical practices.
JEPI is an actively managed fund, which means the portfolio managers make investment decisions based on research and market analysis. This can lead to higher management fees than passive funds, which track an index. However, JEPI's experienced portfolio managers' active management approach can generate returns above the benchmark index.
JPMorgan & Co. is an American financial institution founded by J. P. Morgan in 1871, now a subsidiary of JPMorgan Chase, one of the largest banking institutions in the world. With its long-standing history and reputation, investors can have confidence in JEPI's management team's expertise and knowledge of the equity markets.
JEPI may fit income-seeking investors who want exposure to equity markets with lower volatility, management team experience, disciplined investment process and focus on ESG factors. As an actively managed fund, it may have higher management fees than passive funds, but its potential returns could be worth the added cost.