JEPI vs XYLD - Which ETF Is Better?

Both JEPI and XYLD aim to generate consistent income for their investors using distinct strategies. JEPI seeks to deliver a portion of the returns associated with the S&P 500 Index with less volatility by investing in a diversified portfolio of high-quality U.S. stocks, including those from the S&P 500. It then writes call options against these holdings to generate additional income.

On the other hand, XYLD focuses on providing investors exposure to the S&P 500 index by employing a covered call strategy on the stocks within the index.

Which one of these funds will come out on top? Keep reading to find out!

$JEPI - JPMorgan Equity Premium Income ETF

Goal: JEPI aims to generate regular income by investing in a diversified portfolio of high-quality stocks while writing call options against them.

Number of Stocks held: 134

Dividend Yield: 11.29%

Annual Expense Fee: 0.35%.

Benefits of JEPI: JEPI provides investors with exposure to a diverse basket of blue-chip stocks, known for their stability and long-term growth potential. With its focus on generating consistent income through call options, JEPI offers an attractive monthly dividend. The fund's relatively low expense ratio compared to similar funds is an added advantage.

Downsides of JEPI: As a downside, JEPI may not perform as well during bull markets, as its primary focus is on providing consistent income rather than maximizing capital growth. Additionally, it is a relatively new fund with a shorter track record.

The Top 10 Stocks Held In $JEPI:

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$XYLD - Global X S&P 500 Covered Call ETF

Goal: The goal of XYLD is to generate income by investing in the S&P 500 index and writing covered call options on the stocks it holds.

Number of Stocks held: 504

Dividend Yield: 11.17%

Annual Expense Fee: 0.60%.

Benefits of XYLD: XYLD offers investors exposure to the S&P 500 index, which consists of some of the largest and most stable companies in the United States. The high dividend yield resulting from its covered call strategy makes it an attractive option for those seeking income. XYLD has a longer track record than JEPI, providing more historical data for investors to analyze.

Downsides of XYLD: The expense ratio for XYLD is higher than that of JEPI, which may eat into the returns for investors over time. Additionally, XYLD's focus on income generation might limit its potential for capital appreciation during bull markets.

The Top 10 Stocks Held In $XYLD:

Final Thoughts: JEPI vs XYLD

Both JEPI and XYLD could be good options for investors seeking consistent income with relatively lower volatility. The key difference between the two funds lies in their investment focus; while JEPI targets specific S&P 500 blue-chip stocks, XYLD aims for exposure to the entire S&P 500 index.

XYLD's longer track record might be more appealing if you prefer a well-established fund. However, if you are looking for a slightly lower expense ratio and a diversified portfolio of high-quality stocks, JEPI could be the better choice. Keep in mind that both funds are designed primarily for income generation and may not outperform the market during bull markets.

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I recently put together a master list of 88 different ETFs designed to support different investment goals. You can grab it here.

And as always: Buy things that pay you to own them.

-Josh

Blog Post: #094

Do you have a suggestion on which ETFs I should compare next? Let me know here. :)