The older I get, the more I focus on securing my retirement. I focus my retirement account on investments that generate passive income and may ensure a convincing price increase with lower volatility. While this strategy could cause me to miss out on some upside potential, it helps me not lose sleep at night knowing my retirement stays on track.
I recently added a new investment to my retirement account I believe can improve my ability to achieve my retirement goals: JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ). The exchange traded fund (ETF) Offers one high dividend yield and upside potential at lower volatility. I’m starting small, which could become a staple investment for my retirement account.
What is the JPMorgan Nasdaq Equity Premium Income ETF?
The JPMorgan Nasdaq Equity Premium Income ETF has a simple mission: it aims to provide investors with consistent premium income with lower volatility. Nowadays it definitely delivers a premium income return:
As this chart shows, the ETF has delivered a massive 9.2% income return over the last 30 days, giving investors more returns than they could have gotten by investing in high yield bonds (i.e Junk bonds). Meanwhile, the dividend yield over the last 12 months was even higher (10.8%).
The ETF pays monthly distributions to its investors. They vary from month to month based on the returns the ETF generates:
The actively managed fund charges investors a fairly reasonable price ETF expense ratio of 0.35%. This competitive management fee allows investors to keep more of it Income generated by the fund.
How the JPMorgan Nasdaq Equity Premium Income ETF Generates Returns
The JPMorgan Nasdaq Equity Premium Income ETF follows a two-pronged investment strategy:
-
Underlying stock portfolio: The fund managers use an applied data science approach to fundamental research and portfolio construction to create a high-quality equity portfolio.
-
Disciplined options override strategy: The fund writes out of money Call options on the Nasdaq-100 Index. The aim of this strategy is to generate distributable monthly income for fund investors.
The means primarily The income-generating strategy involves selling call options on the Nasdaq-100, an index full of growth stocks. It tends to be more volatile than that S&P 500. However, volatility benefits fund investors because it allows the fund to earn higher option premium income by writing calls on the index. Because of these dynamics, the ETF offers a higher return than its sister fund. JPMorgan Equity Premium Income ETFthat writes call options on the S&P 500.
The other aspect of this fund’s strategy is holding a portfolio of stocks. The company currently has 97 holdings (including options), led by:
Although these top tech stocks are also among the largest holdings in the Nasdaq-100, the fund does not aim to track that index. The company holds stocks based on its data-driven, fundamental approach.
The fund’s portfolio offers investors equity potential. Although the Company tends to hold more volatile stocks, it offsets this volatility by selling call options on the Nasdaq-100 Index, which generates income while reducing volatility. This strategy makes it possible to achieve more stable returns.
A great addition to my retirement portfolio
I’m excited to add the JPMorgan Nasdaq Equity Premium Income ETF to my retirement account. The fund should provide me with a prime monthly income stream that I can reinvest until I’m ready to retire. Furthermore, it should be so Offer low volatility price increases to increase the value of my account. These features will likely make this an ETF that I will buy regularly as I work toward retirement.
Should you invest $1,000 in Jp Morgan Exchange-Traded Fund Trust – JPMorgan Nasdaq Equity Premium Income ETF now?
Before you buy shares of Jp Morgan Exchange-Traded Fund Trust – JPMorgan Nasdaq Equity Premium Income ETF, you should consider the following:
The Motley Fool Stock Advisor The analyst team has just identified what they think this is The 10 best stocks so investors can buy it now… and the Jp Morgan Exchange-Traded Fund Trust – JPMorgan Nasdaq Equity Premium Income ETF was not one of them. The ten stocks that made the cut could deliver huge returns in the years to come.
Think about when Nvidia created this list on April 15, 2005… if you have $1,000 invested at the time of our recommendation, You would have $506,291!*
Stock Advisor provides investors with an easy-to-understand roadmap to success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor has service more than quadrupled the return of the S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns from April 22, 2024
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Matt DiLallo holds positions in Alphabet, Amazon, Apple, Jp Morgan Exchange-Traded Fund Trust – JPMorgan Nasdaq Equity Premium Income ETF, JPMorgan Chase and JPMorgan Equity Premium Income ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, JPMorgan Chase, Microsoft and Nvidia. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.
Why I Just Added This Ultra-High Yield Dividend ETF to My Retirement Account was originally published by The Motley Fool