XYLD - JEPI: Forget Capital Gains And Focus On High Income

• The JPMorgan Equity Premium Income ETF offers investors exposure to U.S. large cap stocks but with a significantly higher dividend yield, which currently sits at almost 11%.
• This high yield is achieved primarily through investments in equity-linked notes which generate income from call options premiums. It also invests in lower volatility stocks relative to the S&P 500.
• While this strategy means that the ETF will likely underperform in a strong S&P 500 bull market, a flat or declining market should see the JEPI strongly outperform.
• The use of derivatives and the limited track record suggest caution is warranted, but from a risk-reward perspective the ETF looks set to outperform, particularly for U.S. focused investors.

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