Generating Steady Cash Flow: The 11.8% Yielding ETF with Monthly Dividends

JEPI Stock

The JPMorgan Equity Premium Income ETF (JEPI:NYE) has quickly become one of the most-discussed exchange-traded funds (ETFs) since its launch in May 2020.

With its monthly dividend payout and a yield of 11.8% on a trailing basis, more than seven times the average yield for the S&P 500, JEPI has attracted over $21 billion in assets under management.

The ETF’s strategy is to generate income while limiting the downside, by investing in U.S. large-cap stocks, selling call options with exposure to the S&P 500, and equity-linked notes (ELNs). JEPI’s holdings are diversified, spread out across 115 U.S.-based stocks, with its top ten holdings making up 17.1% of assets.

Its holdings include stocks from traditionally stable and defensive industries such as consumer staples, financials, and healthcare. However, the ETF’s approach means it may lag behind the broader market during a bull market.

While JEPI’s risks include its limited track record, the ETF offers a compelling one-year return for investors looking for income rather than capital appreciation.

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