Everyone is talking about JEPI, few are talking about holding JP Morgan's Equity Premium Income ETF is a bad idea. That's because 80% of the "income" being generated by this active investment strategy comes from selling covered calls. They're not covered calls, they're equity linked notes ELNs, people will say. Correct. JEPI's fund managers don't log into Robinhood and sell covered calls all day. An ETF with $32 billion in assets needs to do things differently which is why they use ELNs to generate income which is actually a play on volatility. When we understand how covered calls work - they cap returns on the upside - then it's intuitive why JEPI's total return cannot outperform the market in the long term, and the JEPI ETF prospectus tells us that. People who argue that short-term investors can hold it for income are missing the point - this asset's total return is less than simply holding a broad market ETF. If you want income, don't look for instant gratification. A dividend growth ETF or strategy like SCHD allows investors an initial lower yield, but will quickly grow to exceed JEPI's yield in the long term. Don't invest in things you don't understand, and with JEPI there's only one sure thing - the fund managers (who have no real incentive to maximize total return as they explicitly tell you) are laughing all the way to the bank.


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