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.

RESEARCH PIECES USED IN THIS VIDEO:
1. Is SCHD the Best Dividend ETF?
[ Ссылка ]
2. Judging the Two Biggest Dividend ETFs
[ Ссылка ]
3. Why Trading Options is a Horrible Idea
[ Ссылка ]
4. Quantigence – A Dividend Growth Investing Strategy
[ Ссылка ]

CHAPTERS:
00:55 Introducing the JEPI ETF
02:34 JP Morgan's JEPI cash cow
04:18 Why JEPI is so popular
04:57 Understanding covered calls
07:43 Covered call strategies underperform
09:31 Covered call takeaways
10:53 Where JEPI's yield comes from
12:45 Explaining how JEPI works
15:11 A better covered call strategy

ABOUT US:
This video is brought to you by Nanalyze, a media and research firm founded by finance professionals with decades of experience. We share insights about #DisruptiveTechnology #stocks and #DividendGrowth stocks in a language that is future-proof and easy to understand.

Read all the Nanalyze Premium articles you'd like for free! Sign up for a 30-day trial of our monthly subscription with no strings attached: [ Ссылка ]

DISCLAIMER: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, along with independently researching and verifying, any information contained within our YouTube videos or on our website, whether for the purpose of making an investment or otherwise.

#etfs
#etfstobuy
#dividendgrowth
#dividendetfs
#schd
$schd
#coveredcalls
#coveredcall
#optionstrategy

свернуть