My current issue with JEPI is that its yield used to be its “hook” that created all of that asset inflow. But it yielded 12% back then, when T-bills yielded very little. Now, the fund yields more than one-third less, and T-bills have been steady.
The punch line? As noted above, JEPI is still a stock portfolio. So renewed and sustained stock market weakness would leave this ETF with a much smaller yield cushion. Lower income level without the stock market surging to supplement that? Both motivations to own JEPI would be at risk. And I think they are. So I’m not attracted to this ETF. No matter how popular it is. “Accident waiting to happen” would be my bottom-line.
Solid ETF? Yes. Rockstar? No.
JEPI is, at its core, an equity ETF, as are many covered call ETFs. That is apparent in looking at its top 10 holdings. That looks like a fairly normal, US equity portfolio. It is not a top-heavy portfolio, and is actively-managed. That allows the managers some flexibility. And, its expense ratio (0.35%) is shareholder-friendly, given the active management and covered call writing features here.
