The first half of 2023 is in the books, and it has been a pretty good year for the JPMorgan Equity Premium Income ETF (AMEX:JEPI). With a focus on generating income for investors, JEPI is a popular choice among income-focused investors looking to boost their portfolio returns. However, despite its strong performance, there are some caveats that investors should be aware of before diving into this ETF.
Covered-call funds have recently come back into the spotlight. Investors poured over $26 billion into the now-$65-billion derivative income strategy. JEPI is a terrific ETF for income investors, but it's not perfect and investors shouldn't focus just on the high yield. While the high yield may be enticing, it's important to consider the overall risk profile of the ETF and whether it aligns with your investment goals and risk tolerance.
These two popular ETFs have very different strategies. Investor interest in one of the industry's biggest success stories is already beginning to stagnate. It's important for investors to do their due diligence and understand the underlying holdings and investment strategy of JEPI before making an investment decision.