JEPQ
J.P. Morgan Nasdaq Equity Premium Income ETF
stock NASDAQ ETF

Well, for me...I can tell you that I have been maxing out my IRA in a mutual fund for awhile now. The fund is described as an investment that seeks reasonable income and capital growth.  Dividends are quarterly, long term and short term capital gains are paid in November. In 2023 that totaled $19,690.93, in 2024...$98,738.59. Working full time this is largely irrelevant, let it grow. But now that I'm looking at retirement I want a monthly income without the wild annual fluctuations. I don't want to worry about market downturns and selling shares at a loss. Tools like JEPQ and MSTY allow me to take the money that's been growing and convert it into monthly income. In retirement you don't give a shit if your portfolio goes to the moon you just want it to keep the lights on so you can find the bathroom.

That amount into JEPQ would return around 120K a year just in dividend payment

Excellent and very useful --- especially the point about redemption risk. To top it off, right now (7/9/25) JEPQ trades at about a 4% premium to NAV. The potential (probable) loss of premium is another reason why JEPQ underperformed in the last three market slumps, the last being the Apirl tariff tiff.
I was starting to think about making a small (1 or 2%) allocation to covered call ETFs, but you talked me off of the ledge. Thanks.

These are supposed to be actively managed funds....its about time they started doing something to tweak it. I've seen alot of people here say they already ditched JEPI and JEPQ for the neos funds.
JEPQ and JEPI have been under performing and still haven't fully recovered from April

I don’t know if anyone has mentioned this but I buy ETFs like jepq and the like because I have a hard time knowing when to sell. I also feel bad if I have to sell on a down day and also feel like I will miss out if I sell while it is on an upward trajectory. Using the covered call ETFs I get income at regular intervals I can use to fund my retirement without ever worrying about should I sell now or wait a couple of days. To your point though I am bullish on QQQ and SPY so holding JEPQ and JEPI makes sense but since these are broad ETFs and I don’t hold individual company cover call ETFs I don’t think your argument really works for my reasons.

It’s not really an either / or. You can own VOO & JEPQ and that hedges the downside.
Again we had a decade of flat returns. If folks are 55+ they don’t have time for a 20-30% downturn to recover. And honestly these type of funds might play well with trump yo-yo market swings

I guess I’m just trying to understand why someone would value a monthly income distribution with capped gains. If the market goes down, the value of the fund will go down even as it continues to pay distributions.
With an index fund you can get the all the benefit of market gains and you don’t have to pay taxes on it until you sell. I’m genuinely asking to try and understand what type of investor these products.
If I want to hold a security that pays income with relatively low risk, I buy ET, MO, and PFE. If I want to generate high returns with high risk, I buy something like RDDT, HOOD, or DASH. If I want an investment that I can dollar cost average twice a month with each paycheck, I buy VOO. I genuinely just wanted to hear arguments for why JEPQ or JEPI might be a superior alternative to VOO despite the high fees from the perspective of those who own it.

So should I not be investing in JEPI, JEPQ, and SCHD?

I was laid off a few months ago and moved some growth into JEPQ/JEPI. Helps have a more stable view of my finances month to month. I would have preferred to have stayed in growth.
I’m sure there are plenty of use cases like mine.

Sure JEPQ is down like 7% since February but it probably reclaim that by the end of the year this negating the NAV erosion
He should still be fine as long as he didn’t sell

This does not make sense if you aren't neutral to slightly bullish on the markets. You can incur significant losses and in turn loss of income on JEPQ during that time. While the strategy limits upside is BARELY does anything for the downside. If you can think of the V shaped recoveries in the recent past this absolutely destroys covered call funds. This strategy is simply too risky for this individual in my opinion.

Many investors buy covered call ETFs like JEPI, JEPQ, SPYI, QYLD specifically for income. These funds are designed to produce high monthly or quarterly income. They are used by retirees and income investors for that purpose.
Covered call ETFs are not ideal for high growth investors. They are absolutely appropriate for those seeking income, stability, and modest returns.
Not here for a debate. There are many reasons why a person would invest in ETFs. Your viewpoints are to narrow and lacking the diversity of investor goals.

Say for this situation
A guys sold his business for 2 million dollars
His expenses are say 80-90k a year
He needs to buy time for his investment to reach critical mass so he can live off SCHD
So he put 1 million into JEPQ and live off that for 5 years
And 1 into QQQ hoping in 5 year he reach critical mass
He don’t care if his JEPI loses upside all he want is to buy time for that 5 years
Does this use case make sense ?

Income is a thing. Plus something like JEPQ generates income even when the market goes sideways for years.
It’s like an entire generation of kids have never seen a real down market (like 2000)

As I see it Jpmorgan and NASDAQ take the money that is put on JEPQ/QQQI/JEPI and use it to cover their own covered call strategy to their holdings which they distribute a portion to the ETFs holders. Could be wrong though.
Speaking for myself only, I just like its safe during these times where one worthless headline could make a thriving stock crash. Not to mention I don't yet have enough buying power to start applying the calls myself that would let me get enough capital while holding growing stocks and the etfs. So just holding until I have enough or if the etfs fall off. Though I only have 3.

My 90 y/o mom has 600k split between QQQI, SPYI JEPQ, and ET. She could care less about portfolio balance and only wants that sweet income rolling in.
Different folks have different goals.

I’ve been seeing dozens of posts over the past couple months on this subreddit with portfolio dividend yields of 25%-50% filled with a combination of Index Fund Equity Covered Call ETFs like JEPI, JEPQ, or QQQY along with Individual Stock Covered Call YieldMax ETFs like MSTY, NVDY, and TSLY. What is the reasoning behind owning these stocks that pay monthly taxable distributions instead of just owning the index funds or individual stocks themselves?
Particularly for the individual stocks, it appears to me that you’re paying YieldMax a 0.99% Fee to get a lower return than you would otherwise get from just owning the stock.
For example, the stock price return of MSTR over the last 12 months is 207.57% while the total return for MSTY with dividends included over the same period was just 135.45%.
What is the point of these funds and why have they become so popular?

Yes it does provide you downside protection!! but it also limits your upside potential and that is why its a bit safer to hold for long term investment. The key is to diversify. You would have to do some math lol to find out how much of JEPI and JEPQ you should hold in your portfolio.
So here is the explanation, for example, JEPI reached highest in Nov 2024 of $60 and dipped to $50 in march April 2025, that's a decrease of about 17%, in the same time SPY decreased 21% so yes there is our downside protection. BUT SPY has since recovered meaning it gave back all of the losses of 21% and it has reached $622, which is an additional 1.6% gain.
if you find the total return of JEPI (dividend + capital appreciation) > Total return on SPY then its worth it or else it was better to hold SPY for that period. Take this with a grain of salt because I think holding JEPI and JEPQ is good for portfolio because it gives you the downside risk protection.

At the time JEPI was introduced there were covered calls but many didn't retain any captial gains of or had NAV errosion. but payed much higher yields. JEPI promised some capital retention and decent yields. And money flowed into the fund. JEPQ quickly followed. while these 2 funds are good the dividends are taxed as income. Also these funds don't directly trade covered call on the index they hold. Instead they use 3rd party banks to trade Equity linked Notes that are not as popular as the actual indexes.
Today we have new funds the take exta steps to reduce the tax on the dividends you receive. Also they dropped the equity linked notes. Two of tje most popular new funds funds are SPYI 11% yield, and QQQI 13% yield. Thee funds also retain some captial gains. and have a slightly higher yield and have been performing slightly better than JEPQ and JEPI. So cash flows into JE products has dropped substantially.
By increasing the holdings of the magnificent 7 they increase teh volatility of there index slightly which helps increase yields to be competitive with the newer rivals.

Is this in a taxable account? You want to avoid dividends in taxable.
I think you should have 90% in either VOO, VTI or VT. The other 10% you can try the JEPQ one.
Why do you have QQQI and JEPQ, they're very similar and QQQI has double the fees?