Forget JEPI: This Covered Call ETF Yields Over 12% With Less NAV Erosion

4 days ago 4

Austin Smith

Wed, March 18, 2026 astatine 6:00 AM CDT 5 min read

JPMorgan Equity Premium Income (JEPI) returned 10.5% implicit the past twelvemonth portion the S&P 500 gained 20.1%, with its options operation capping upside to money an 8% monthly yield. NEOS S&P 500 High Income (SPYI) uses telephone spreads alternatively to present 19.9% returns and a 7.6% output connected $45 cardinal successful assets, portion NEOS Nasdaq-100 High Income (QQQI) applied the aforesaid strategy to tech-heavy vulnerability with a 24.1% instrumentality implicit the past year.
SPYI and QQQI spread-based structures let greater marketplace information than JEPI’s outright covered telephone approach, demonstrating a structural vantage successful rising equity markets that translates to stronger full returns for income investors.
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Most income investors who discovered covered telephone ETFs recovered JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI) first. It pays monthly, yields astir 8%, and carries JPMorgan's name. The occupation is that JEPI's operation softly costs investors successful rising markets, and a newer money from NEOS has spent the past twelvemonth demonstrating a amended approach.

JEPI generates income by selling equity-linked notes tied to S&P 500 options. The premium from those notes is what funds the monthly distribution. But this operation caps however overmuch of immoderate marketplace rally JEPI tin capture. When the S&P 500 runs hard, JEPI's NAV lags due to the fact that the options overlay surrenders the upside successful speech for income. Over the past year, JEPI returned 10.5% connected a terms ground portion SPY returned 20.1% implicit the aforesaid period. That spread is the structural outgo of the strategy.

NEOS S&P 500 High Income ETF (NYSEARCA:SPYI) uses a spread-based options strategy alternatively than selling calls outright. Instead of capping upside entirely, SPYI uses telephone spreads connected the S&P 500 index, which allows much information successful rallies portion inactive generating meaningful premium income. The effect implicit the past 12 months tells the story: SPYI returned 19.9% connected a terms basis, astir matching the S&P 500's 20.1% gain, portion JEPI trailed by astir 10 points.

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SPYI's 7.6% dividend output is somewhat little than JEPI's 8.2%, but the spread-based operation allows SPYI to retrieve much of that spread done NAV appreciation — a dynamic that showed up intelligibly implicit the past year. For income investors, full instrumentality is the much implicit scoreboard. The tradeoff betwixt output and full instrumentality is simply a cardinal information erstwhile comparing these funds.

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