Investing

Why JP Morgan's High-Yield Dividend ETF Is the Safest Way to Stay Invested Now

Lee Jackson

Published: March 18, 2025 6:56 am

Last Updated: March 18, 2025 7:17 am

Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. With the stock market at one of the most precarious positions it has been in over a decade and the “buy-the-dip” strategy not working as well as it has over the last two years, investors looking to stay in the stock market have few choices that make sense as we remain in a very hostile environment for aggressive stocks, especially in the technology sector. 

24/7 Wall St. Key Points:

• The stock market is trying to fight back from a swift downfall to correction territory.
• Consumer spending and sentiment are dropping as volatility jumps.
• Covered Call ETFs like J.P. Morgan offers make sense for investors looking to stay in the market.
• Are you concerned about the market volatility and how it may affect you? Make an appointment with a financial advisor near you for a portfolio review today. Click here to get started. (Sponsored)

Many investors in 2025 need dependable passive income, and one outstanding way to get reliable regular dividends is to invest in exchange-traded funds (ETFs). Unlike open-end mutual funds, ETFs trade on major exchanges like stocks. They own financial assets such as stocks, bonds, currencies, debts, futures contracts, and commodities such as gold bars.

One massive advantage to owning ETFs is that they can be sold anytime when the markets are trading. We screened our 24/7 Wall St. ETF research database and found six top funds that have these qualities:

• High dividend payout
• Trade at or at a discount to net asset value
• Are managed by major Wall Street firms
• Reasonable expense ratio

One of our favorite funds for 24/7 Wall St. growth and income investors is the JPMorgan Equity Premium Income ETF (NYSEArca: JEPI). In addition to being run by one of the top firms on Wall Street, the strategy is designed to take advantage of moves in the market, whether up or down. The fund is the world’s largest actively managed ETF, pays a rich monthly dividend yield with limited duration risk, and, according to JPMorgan, is suitable and can be used as a diversified equity solution or credit replacement.

They noted this when discussing the fund on their website:

JEPI is a conservative equity solution comprised of two fundamental building blocks: a defensive equity portfolio of U.S. large-cap stocks and a disciplined options overlay. The fund is designed to provide distributable income through a combination of dividends and options premiums. In return for the options premium, investors may forgo a portion of the market’s upside. Options premium generated can vary depending upon market volatility; as volatility increases, the potential for incremental income and upside also increases.

The fund acts as an income diversifier given its ability to distribute income without exposure to duration or credit risk relative to other income-yielding products. By selling call options on the S&P 500 Index, the ETF seeks to deliver monthly income with less volatility than the broader market.

This gigantic fund has taken in billions since its inception in 2020 and currently has a stunning $42 billion under management. It is run by top portfolio managers at JPMorgan. Once again, the fund seeks to achieve this objective by:

Creating an actively managed portfolio of equity securities comprised significantly of those included in the fund’s primary benchmark, the Standard & Poor’s 500 Total Return Index (S&P 500 Index). Utilizing equity-linked notes (ELNs), selling call options with exposure to the S&P 500 Index

Dividend yield = 7.14% paid monthly
NAV = $56.94
Expense ratio = 0.35%

Whether the stock market sell-off deepens or the brief correction is the end, this is an outstanding investment vehicle for those seeking dependable monthly income and wanting the potential for their capital invested to grow.