JEPQ: JPMORGAN NASDAQ EQUITY PREMIUM INCOME ETF
ETF Education Report: JPMORGAN NASDAQ EQUITY PREMIUM INCOME ETF (JEPQ)
What this ETF is trying to do
The JPMORGAN NASDAQ EQUITY PREMIUM INCOME ETF (JEPQ) is an exchange-traded fund that focuses on generating income. It is classified as an "option income" and "covered call" ETF. This means it uses specific investment strategies to try to provide cash to its investors.
What the numbers show
It is important to understand that "price return" and "total return" are different. Price return only tracks how much the share price moves. Total return includes both the price movement and the cash distributions paid out.
Based on the data provided:
• Year-to-Date (YTD): The price return is approximately 5.14%, while the total return is approximately 13.89%.
• One-Year: The price return is approximately 6.89%, while the total return is approximately 19.93%.
• Three-Year: The price return is approximately 30.27%, while the total return is approximately 80.48%.
To visualize the price change, the current price is $61.11. The estimated price from roughly one year ago was $57.17.
Income and distribution explanation
This ETF is designed to pay out cash regularly. The distribution yield is approximately 11.07%. This number describes the cash distributions relative to the ETF's price. The fund usually pays out monthly, with 12 payouts recorded over the last year.
While a high yield can provide regular cash, it is important to remember that a high distribution yield does not mean an investor earned that exact percentage as their total return.
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). Some investors worry that high payouts might cause the fund's value to shrink over time. However, for JEPQ, the erosion-risk score is 100, and the label states "No price erosion detected." There is no severe erosion-risk flag for this ETF.
Top Holdings
The following are the top holdings in the portfolio (note that this is a partial list):
• NVIDIA CORP: 7.68%
• APPLE INC: 6.39%
• MICROSOFT CORP: 5.33%
• MICRON TECHNOLOGY INC: 4.83%
• ALPHABET INC CLASS C: 4.75%
• ADVANCED MICRO DEVICES INC: 4.16%
• AMAZON.COM INC: 3.81%
• META PLATFORMS INC CLASS A: 3.01%
• TESLA INC: 2.14%
• LAM RESEARCH CORP: 2.13%
Pros
• The ETF has shown significant total returns over the last three years.
• It provides a high distribution yield for those seeking regular cash.
Cons
• Because it uses option strategies, its performance may differ from a standard index.
Beginner takeaway
When looking at JEPQ, notice the large gap between the price return and the total return. This gap exists because the total return includes the high cash distributions. Always look at both numbers to see how much of your return comes from share price growth versus cash payments.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | NVIDIA CORP | NVDA | 7.68% |
| 2 | APPLE INC | AAPL | 6.39% |
| 3 | MICROSOFT CORP | MSFT | 5.33% |
| 4 | MICRON TECHNOLOGY INC | MU | 4.83% |
| 5 | ALPHABET INC CLASS C | GOOG | 4.75% |
| 6 | ADVANCED MICRO DEVICES INC | AMD | 4.16% |
| 7 | AMAZON.COM INC | AMZN | 3.81% |
| 8 | META PLATFORMS INC CLASS A | META | 3.01% |
| 9 | TESLA INC | TSLA | 2.14% |
| 10 | LAM RESEARCH CORP | LRCX | 2.13% |