JEPQ - FEPI: High Yield But Poor Upside Capture
2024-06-21 12:47:34 ET
Summary
- REX FANG & Innovation Equity Premium Income ETF (FEPI) offers concentrated exposure to FANG stocks and other top technology companies.
- The fund combines big tech stock exposure with the potential for enhanced income through a covered call strategy.
- While FEPI's yield is high, it has grossly underperformed on total returns because its portfolio is only exposed to the stock's downside while trading away its upside.
- Overall, I rate FEPI an avoid.
I came across the REX FANG & Innovation Equity Premium Income ETF ( FEPI ) while looking for funds with concentrated exposure to Nvidia ( NVDA ) and the Magnificent 7 stocks. Other broadly followed analysts have called the FEPI a 'high-yield tech play', so I decided to take a look at the fund and see if it is worth investing in, for those seeking concentrated exposures to the FANG stocks....
FEPI: High Yield But Poor Upside Capture