JEPQ vs. JEPI: Which Premium Income ETF Is the Best to Buy Right Now?

With Liberation Day tariffs troubling the global markets and the potential for things to escalate in the coming weeks and months, investors nearing retirement may wish to make small changes to their portfolio to be better prepared for a storm that could span the rest of the year.

Indeed, with stocks cratering in the sessions following last week’s unveiling of reciprocal tariffs, the S&P 500 is at risk of falling into a bear market (a less than 3% decline away) alongside the Nasdaq 100. The sheer steepness of the latest market correction has made the current environment feel just a bit more unsettling than the year-long bear market of 2022. And while hopes for a V-shaped recovery could be dashed as Trump responds to retaliatory tariffs with more tariffs, while the Fed sits on its hands, I do think panic is no way to make it through these turbulent, tariff-plagued times.

In this piece, we’ll check in on two premium income ETFs that stand to pay investors more yield for their patience as they ride out Trump 2.0 tariffs that could make the Trump 1.0 trade war look mild in comparison.

JPMorgan Nasdaq Equity Premium Income ETF

The JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is a cost-efficient (modest 0.35% expense ratio) covered call ETF that allows investors to get a double dose of passive income through the sale of call options on stocks held within the ETF. Indeed, without such an option premium income generated from such a strategy, it’d be virtually impossible to command a yield close to 10%.

Indeed, the extra income produced doesn’t come free. It comes at the cost of upside potential. In a rocky stock market that’s struggling to find its footing, trading off upside for extra income is the right call. Even if we’re still in a bull market, going for more certainty in the form of extra premium income can be a better trade-off, especially for investors who want to get paid to sail through a horrendous trade war that probably won’t be so quick to resolve.

What makes the JEPQ so intriguing is that it is heavier in the harder-hit Nasdaq-traded tech names. For investors seeking a more bountiful way to bet on big tech’s tumble, the JEPQ may be the way to go. It’s a riskier covered call ETF, but one that may offer a better balance between growth and income. With a 10.92% yield looks enticing, just be ready to ride out the waves, with shares down 20% from all-time highs, slightly less than the Nasdaq 100.

JPMorgan Equity Premium Income ETF

For investors seeking a more standard option, the JPMorgan Equity Premium Income ETF (NASDAQ:JEPI) could be the better way to go. The ETF doesn’t go out of its way, like the JEPQ, to provide added exposure to the hard-hit tech names. At the time of writing, shares of JEPI yield 7.5% after tumbling around 14% from 52-week highs. Indeed, it’s been less painful to go with the JEPI versus the S&P 500 amid the latest correction. With a beefed-up yield, staying the course is made that much easier for retirees seeking moderate growth and a substantial yield boost.

For most, the JEPI is good enough to get the job done. Shares are up just over 3% in the past five years (the yield is the significant contributor of returns), while the JEPQ is sitting down around 5%. Indeed, the JEPQ is the more rewarding, higher-upside play of the two, but faces more downside risks if tech continues to be in the blast radius of escalating Trump tariffs.

Should you go for the JEPQ or JEPI?

Between the JEPQ and JEPI, more cautious investors may wish to stick with the latter. However, for those who want to take advantage of the vicious Nasdaq 100 bear market (perhaps there’s more value in tech after taking on more damage in this latest Spring fall), and want a higher yield, the JEPQ could be the timelier play. For younger investors who don’t yet have retirement on their radars, the JEPQ looks like the more rewarding of the two.

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