JEPI vs JEPQ: What the 8% and 11% Yields Are Made Of — and What They Cost

JEPI and JEPQ are the two largest income ETFs in America — about $46 billion and $40 billion — and they are sold on one number each. JEPI pays roughly 8% a year, JEPQ roughly 11%, both monthly, both for a 0.35% fee. Put $100,000 into JEPQ at today’s price and the last twelve months of distributions would have sent you $951 a month.

That number is real. It is also the least useful number on the fact sheet, because a covered-call fund does not earn its yield the way a dividend stock does — it manufactures it, every month, by selling away part of the market’s upside. So the honest question is not “which yield is higher?” It is what is the yield made of, how much does it move month to month, and what did each fund give up to pay it?

We read both J.P. Morgan fact sheets and the last twelve distributions side by side. Short version: JEPQ has paid more and returned more, JEPI has moved less — and both trailed their own index by 6 to 15 percentage points a year. Which one you want depends on whether you are buying an income stream or a smoother ride, because neither is a cheap way to own the index.

CalculatorAI is not affiliated with J.P. Morgan Asset Management. Figures are quoted from the funds’ July 31, 2026 fact sheets and the funds’ declared distributions, as noted in each section.

The machineHow both funds make a monthly payout

Both ETFs run the same engine. Roughly 80% of the money owns a portfolio of U.S. large-cap stocks. The rest — up to 20% — sits in equity-linked notes, or ELNs: a note that pays the fund the premium from selling call options on an index. The fund collects that premium every month and passes it on, together with the dividends from the stock sleeve, as the distribution.

The two funds differ in what the stock sleeve owns and which index the calls are written on:

• JEPI (launched May 2020) writes calls on the S&P 500 and holds a deliberately low-volatility, defensive basket of about 129 stocks — its top ten holdings are each around 2% or less and include Mastercard, Johnson & Johnson and Ross Stores next to the megacaps.
• JEPQ (launched May 2022) writes calls on the Nasdaq-100 and holds a Nasdaq-like book of about 110 stocks. NVIDIA is 6.9%, Apple 6.4%, Alphabet 5.3%; information technology is 47.7% of the fund.

That single difference explains most of the yield gap. Option premium is priced off expected volatility, and the Nasdaq-100 is a more volatile index than the S&P 500. Selling calls on it simply fetches more money per month — which is why JEPQ pays more, and also why it swings more.

The yieldThree different “yields”, and which one is honest

The fact sheets quote two yields, and on JEPQ they disagree by more than four points: a 30-day SEC yield of 15.06% and a 12-month rolling dividend yield of 10.83%. Neither is wrong. They measure different things.

The 30-day SEC yield annualises the income the fund earned in one month. In a month when option premiums were rich — in July 2026 the Nasdaq-100 fell 6.6% and volatility spiked — it prints a number the fund will not sustain for twelve months. A month later the same statistic can read 12%. Treat the SEC yield as a weather report, not a forecast.

The 12-month rolling yield adds up the last twelve actual distributions, each divided by the fund’s NAV on its ex-date. It is the number you would have received. We prefer a third version — the same twelve distributions divided by today’s share price — because that is the yield a buyer today is paying for:

• JEPI: $4.58 over the last twelve ex-dates, $56.25 a share → 8.15%
• JEPQ: $6.76 over the last twelve ex-dates, $59.24 a share → 11.42%

Three points of yield is the whole marketing case for JEPQ. It is a real gap. What the headline hides is that it is a gap between two averages of numbers that move every month.

The paycheckWhat $100,000 actually paid, month by month

Here is the part no fact sheet shows: the twelve monthly distributions, translated into the cheque a $100,000 investor would have received at today’s share count.

Over the twelve months, JEPI paid $8,148 and JEPQ paid $11,418 on the same $100,000. But JEPI’s monthly cheque ranged from $612 to $796, and JEPQ’s from $753 to $1,190. JEPQ’s smallest month (October 2025) paid less than JEPI’s best. Its three biggest cheques all arrived in the last three months, around the Nasdaq-100’s 6.6% July fall — the premiums were richest exactly when the shares were worth less.

That is the structural fact about a covered-call fund: the income is highest when the market is scared. In a calm, steadily rising market the premiums shrink, and so does the distribution. JEPI’s monthly payout has drifted down from $0.45 in May to $0.37 in September; the fund’s own 30-day SEC yield fell from 8.20% in June to 7.88% in July.

The costWhat each fund gave up to pay you

A call option sells someone else the right to the upside above a strike price. The premium is yours; the upside beyond the strike is theirs. So a covered-call ETF is expected to lag its index in a strong market, keep pace in a flat one, and fall a little less in a bad one. The fact sheets let us check how that has played out.

Over three years JEPI returned 8.99% a year against the S&P 500’s 20.61% — a gap of 11.6 points a year, in a period when the index went almost straight up. JEPQ returned 20.40% against the Nasdaq-100’s 26.83%, a gap of 6.4 points. Since launch, $10,000 in JEPI has become $19,388 in six years; $10,000 in JEPQ became $18,836 in four.

Calendar years tell the same story with the other half attached:

• 2022, the down year: JEPI lost 3.54% while the S&P 500 lost 18.11%. That is the whole argument for JEPI in one line, and it is a strong one. (JEPQ launched in May 2022, so it has not yet lived through a full bear market.)
• 2023, the rebound: JEPI made 9.88% against 26.29%; JEPQ made 36.28% against the Nasdaq-100’s 55.13%. Both funds paid the option-seller’s price for a straight-line rally.
• 2024 and 2025: JEPQ stayed within 1 and 6 points of its index; JEPI trailed the S&P 500 by 12.5 and 9.8 points.

JEPI trails more because it is designed to. Its stock sleeve is chosen for low volatility — its one-year beta against the S&P 500 is 0.18 and its standard deviation 7.7% against the index’s 13.2%. It behaves more like a conservative balanced fund with an equity flavour than like the S&P 500 with a dividend. JEPQ’s beta of 0.65 says it still moves with tech; it just moves less.

The taxWhy 11% in a brokerage account is not 11%

One more line the yield figures skip. The stock sleeve pays ordinary dividends, some of which qualify for the lower U.S. long-term capital-gains rate. The option premium does not: income that arrives through an ELN is taxed as ordinary income, at your marginal rate, in a taxable account. Since the ELN sleeve is where most of the payout comes from, the large majority of both funds’ distributions have been classified as ordinary income rather than qualified dividends.

For an investor in the 24% federal bracket, that turns JEPQ’s 11.4% into roughly 8.7% after federal tax and JEPI’s 8.15% into about 6.2% — before state tax. A plain index fund’s 1–2% dividend, by contrast, is mostly qualified, and the rest of its return is deferred until you sell. In a Roth IRA or a 401(k) none of this applies, which is why the funds are so often recommended for tax-sheltered accounts specifically.

The arithmeticHow much capital each fund needs for $1,000 a month

If the last twelve months repeated exactly — a big if, as the month-by-month chart shows — the capital required for a round monthly income is:

$105,000 in JEPQ, $147,000 in JEPI, $300,000 in a 4% dividend portfolio. That comparison is exactly why the two funds have gathered $86 billion — and it is fair only if you remember what the earlier charts said. The dividend portfolio keeps its full share of a rising market and its income does not fall when volatility does. The covered-call funds trade both of those away to shrink the capital requirement.

A common compromise is to hold both. $150,000 split evenly would have paid $14,674 over the last year — $1,223 a month at a blended 9.8% — with JEPI’s smaller swings damping JEPQ’s. The Target Income Calculator runs the same sum for your own income target and your own yield assumption, which is the honest way to do it: put in the smallest recent month’s rate, not the headline.

The verdictWhich fund, for which job

• Buy JEPQ if the job is income, and you already accept tech risk. It has paid more, returned more, and kept closer to its index. Its price is a payout that can move 50% between months and a book that is half technology. Best held where the ordinary-income tax does not bite.
• Buy JEPI if the job is a smoother ride with a cheque attached. A beta of 0.18 and a 2022 loss of 3.5% are what you are paying for, and the payment is a return roughly 11 points a year below the S&P 500 over three years. If you would otherwise hold a 60/40 portfolio for its calm, JEPI belongs in the same conversation.
• Buy neither if the job is growth. Over any multi-year rising market both funds have trailed a plain index fund by a wide margin, and the yield does not make that up. An investor who does not need the cash flow today is usually better served by a broad index fund — VOO or VTI — and by selling shares when income is needed.
• Hold either as a slice, not the whole. A single ETF that is 48% technology (JEPQ) or that writes away the upside of every stock it owns (JEPI) is one position with one behaviour. Our portfolio diversification guide shows how to size a position like this so its behaviour does not become the whole portfolio’s.

Tracking itThe two numbers to watch every month

An income fund has to be tracked on two lines, and most brokerage apps show only one.

The first is the distribution per share, month by month, against the previous year. That series is the early warning: a payout drifting down for three months in a calm market is the fund working as designed, not a fault, but it is also your income budget changing. The Dividend Tracker logs each payment as it arrives, shows the trailing twelve months as one number, and projects the next year from what was actually paid rather than from a yield somebody quoted.

The second is total return — price plus reinvested distributions — against the index the fund sells calls on. That is the line that tells you what the income cost. The Portfolio Tracker keeps both funds beside whatever else you own, with realised and unrealised gains and the dividends in one P&L, so “JEPQ paid me $11,000” and “JEPQ made me $17,000 while QQQ would have made $23,000” are both visible on the same screen. The SCHD income guide applies the same two-line discipline to a dividend-growth fund, where the trade-off runs the other way.

Frequently asked questions

Is JEPQ’s 15% SEC yield real?

For the thirty days it measured, yes. The 30-day SEC yield annualises one month of income, and July 2026 was a high-volatility month with rich option premiums. The fund’s own 12-month rolling yield over the same period was 10.83%. Use the twelve-month number, or better, the smallest recent monthly distribution.

Can JEPI or JEPQ cut their distributions?

They change every month by construction — there is no declared dividend to “cut.” The payout is whatever the option premiums and stock dividends produced. Over the last twelve months JEPI’s ranged from $0.344 to $0.448 a share and JEPQ’s from $0.446 to $0.705. A long calm market would push both lower.

Do I lose money if the market rises?

No — you make less than the index. Both funds still own stocks and still rise with them; the calls cap the gain above the strike for the part of the portfolio they cover. In the three years to June 2026 JEPI captured under half of the S&P 500’s return and JEPQ about three-quarters of the Nasdaq-100’s.

Which is better in a crash?

JEPI has the record: −3.54% in 2022 against −18.11% for the S&P 500. JEPQ has not been through a full bear market yet; its since-launch standard deviation of 13.8% against the Nasdaq-100’s 20.3% suggests it would fall meaningfully less than its index, but more than JEPI.

Where these numbers come from

Fund characteristics — assets, holdings, expense ratio, 30-day SEC yield, 12-month rolling dividend yield, NAV total returns, calendar-year returns, beta and standard deviation — are quoted from J.P. Morgan Asset Management’s JEPI and JEPQ fact sheets dated July 31, 2026, with annualised returns as of June 30, 2026. Distributions per share are the funds’ declared amounts for the twelve ex-dates from October 1, 2025 to September 1, 2026, as published by the funds and mirrored on public dividend-history services; trailing yields divide that sum by the September 15, 2026 morning share prices ($56.25 and $59.24). Income on $100,000 and capital for $1,000 a month assume the next twelve months repeat the last twelve, which is an assumption, not a forecast — the month-by-month chart is the reason. After-tax figures use a flat 24% federal rate on the whole distribution as an illustration; the actual ordinary/qualified split is published annually by the fund. All arithmetic is in a small script run on September 15, 2026 and reproducible from the figures stated here.