JEPI vs. XYLD - Comparing Income ETFs
JEPI and XYLD are both covered call ETFs designed for low volatility and high dividend payments for investors.
Key Comparison
JEPI has a lower expense ratio than XYLD
JEPI only holds 135 low-volatility stocks compared to XYLD’s 500 holdings
Both funds pay a dividend yield ranging from 6-12%
JEPI
JEPI features an actively managed portfolio of high-quality U.S. equities and focuses on writing call options for steady income generation. Launched on May 20, 2020, by JPMorgan Chase, JEPI seeks to offer a part of the S&P 500 total return with reduced volatility.
XYLD
XYLD is a passively managed fund that tracks the CBOE S&P 500 2% OTM BuyWrite Index. With its inception dating back to June 24, 2013, XYLD applies a covered call strategy on the S&P 500, which enables exposure to the index whilst generating income from the option premiums.
Performance Comparison
JEPI and XYLD will perform relatively similarly to each other since both use a covered call strategy. However, the main difference will come from the difference in holdings.
JEPI holds around 135 stocks, while XLYD holds all 500 stocks from the S&P 500. JEPI also focuses on low-volatility stocks, aiming to reduce volatility as much as possible for investors.
Dividend Comparison
The dividend yield of JEPI and XYLD is constantly changing each month based on how much covered call income is generated.
However, both funds' dividend yields range from 6-12%.
Expense Ratio Comparison
Expense ratios impact long-term returns and ought to be considered in investment decisions.
JEPI sports a net expense ratio of 0.35%, while XYLD outdoes it with a higher expense ratio of 0.60%.
JEPI vs. XYLD - Bottom Line
Ultimately, the choice between JEPI and XYLD comes down to the expense ratio and holdings between the two.
If you want to invest in the entire S&P 500, you may prefer XYLD over JEPI.
If you’d rather own a fund that only invests in low-volatility stocks, JEPI is best for you.
Finally, JEPI is the clear winner when it comes down to the expense ratio, as it is nearly 50% lower than XYLD’s expense ratio.
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