Investors looking for hefty dividend payouts and a relative sense of safety have a wide menu of choices nowadays. Among the standouts in the world of exchange traded funds (ETFs) are the JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI) and the Vanguard International High Dividend Yield ETF. (NASDAQ:VYMI).
Both of these ETFs are income-focused, but a head-to-head comparison really brings out the differences between JEPI and VYMI. Is one actually safer than the other, though? Right now, we’ll dig deep and see what the foundational facts reveal.
JEPI: The Yield Is Hard to Beat
At first glance, the JPMorgan Equity Premium Income ETF may appear to be the safest high-yield ETF just because it’s so popular. As the old saying goes, there’s safety in numbers.
Speaking of numbers, the JEPI ETF’s daily average trading volume is around 4.2 million shares. This easily beats the VYMI ETF’s daily average trading volume of approximately 550,000 shares. That’s not necessarily a deal breaker for the Vanguard fund, but there’s a sense of safety with the JPMorgan fund because high volume means you can easily enter and exit your share positions during market hours.
Then there’s the yield, which the JPMorgan Equity Premium Income ETF is famous for. JEPI’s forward annual dividend yield of 7.19% is hard to beat, even among ETFs that are marketed as high yielders.
This implies a certain level of safety for the JEPI ETF. Assuming JPMorgan doesn’t cut the dividend yield, investors could sustain a 7% share-price drawdown and still break even due to the fund’s 7.19% dividend yield.
Staying on the topic of share prices, let’s see how the JPMorgan Equity Premium Income ETF has performed over the past five years:
Gaining 14% in share-price appreciation during the past five years might not be anything to write home about. On the other hand, the JEPI ETF’s substantial dividend yield undoubtedly motivated people to stay invested in the fund.
Peeking into the fund itself, we can see that the JPMorgan Equity Premium Income ETF has a balanced mix of sector weightings, from consumer staples to financials, energy, information technology, industrials, and more. No market sector is over-represented, and JEPI includes famous names like Mastercard (NYSE:MA | MA Price Prediction), Amazon (NASDAQ:AMZN), Bristol-Myers Squibb (NYSE:BMY), and McDonald’s (NYSE:MCD). Thus, you’ll get sector diversification with this fund — but as we’ll discuss in a moment, there are other important types of diversification to consider.
VYMI: Safety Through Geographic Diversification
Vanguard is well known for offering a variety of income-focused funds. The Vanguard International High Dividend Yield ETF, in particular, lives up to its name with a forward annual dividend yield of 4.55%.
Granted, this falls short of the 7.19% yield offered by JPMorgan’s fund. Still, the Vanguard fund’s 4.55% yield is nothing to sneeze at and VYMI might be the preferred choice for some safety-seeking investors.
Admittedly, the JPMorgan Equity Premium Income ETF wins in the areas of high trading volume and annual dividend yield. Regarding sector diversification, both funds feature a reasonable balance of famous stocks across multiple market sectors.
Before getting into the Vanguard fund’s components, it’s worth noting that the VYMI ETF’s expense ratio (i.e., the annualized fee taken by the fund’s managers to hold the fund) is quite low at just 0.17%. Meanwhile, the JEPI ETF’s annual expense ratio is 0.35%, which is higher than VYMI’s expense ratio but is still fairy low.
Now, here’s the real difference maker for safety-minded investors. The JPMorgan Equity Premium Income ETF has 132 component stocks, which suggests a decent measure of diversification. Yet, believe it or not, the Vanguard International High Dividend Yield ETF has 1,491 component stocks.
Furthermore, while JPMorgan’s fund focuses on businesses in the U.S., Vanguard’s fund provides portfolio exposure to companies located around the world. Sure, you’ll get some North American stocks, but you’ll also get stocks representing firms in emerging markets, Europe, the Pacific region, and the Middle East.
Consequently, the VYMI ETF allows investors to participate in the growth of multinational business like Nestlé, Shell (NYSE:SHEL), Siemens, and the Royal Bank of Canada (NYSE:RY) — a virtual tour of the investable planet, and no passport needed. Is all of this intercontinental market participation necessary for today’s investors, though?
That’s debatable, but if safety is your highest priority, then the Vanguard International High Dividend Yield ETF’s geographic diversification is a definite plus. The first couple of months of 2025 reminded investors that U.S.-based stocks can sometimes go down just as fast as they went up.
And by the way, over the past five years, VYMI gained more than 80%, easily outperforming JEPI if dividends aren’t factored in. Perhaps, then, Vanguard’s globe-trotting portfolio should attract investors wishing to balance safety and growth.
In the end, while the JPMorgan Equity Premium Income ETF reigns supreme in terms of popularity and dividend yield, there are other factors to consider. The Vanguard International High Dividend Yield ETF has many more portfolio components, and they’re distributed throughout the world. Therefore, if you still want a fair amount of yield but also seek greater safety through broader geographic participation, it makes sense to choose VYMI over JEPI.
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