A top priority for passive income investors is portfolio diversification and a steady income flow. If you are an investor like me, you’d prefer to hold low-risk assets that generate steady income. This is what makes exchange-traded funds an attractive investment option. ETFs have emerged as a top choice for income-focused investors. They are low-risk, offer portfolio diversification, and have low fees.
A top holding in several portfolios this year, the record net inflow in ETFs is $360 billion in the first four months of 2025. While there are hundreds of ETFs to choose from, passive income investors should consider the yield and aim for low fees, as this will ensure that they retain most of their income. Here are two standout options worth considering.
Key Points in This Article:
- These two JPMorgan income ETFs offer income investors substantial dividends.
- Both funds pay monthly distributions with market-beating yields.
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JPMorgan Equity Premium Income ETF
The JPMorgan Equity Premium Income ETF (
An actively managed fund, JEPI is trading for $56 and has remained flat in 12 months. Its 52-week high is $60 and its 52-week low is $49. It has a 30-day SEC yield of 11.38%. The fund holds 122 stocks and its sector distribution includes:
- Information technology: 15.6%
- Financials: 13.6%
- Industrials: 13.1%
- Other: 12.6%
- Healthcare: 11.4%
No stocks in the fund have a weightage over 2% and its top 10 holdings include Magnificent Seven stocks like NVIDIA (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT) and Amazon Inc. (NASDAQ:AMZN). JEPI has generated an annualized 3-year return of 8% and a 5-year return of 10.94%. $10,000 invested in the fund in 2020 would be worth $17,193 today.
The fund has remained resilient despite the market ups and downs and has generated steady returns. It invests in quality stocks and sells call options through equity-linked notes to generate a higher-than-standard dividend. While the capital appreciation potential will be limited, the dividend income will remain steady. It makes monthly dividend payments and has maintained a consistent level over the years.
JEPI has a low-expense ratio, owns elite stocks, and offers an attractive yield, making it an ideal addition to a passive income investor’s portfolio.
JPMorgan Nasdaq Equity Premium Equity Income ETF
Another JP Morgan ETF known for high yields and low fees, the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) focuses on the Nasdaq 100 and holds 108 stocks. It invests in U.S. large-cap growth stocks that are stable and secure. The fund delivers a regular monthly income through covered call options. JEPQ is heavily focused on the tech sector and holds several Magnificent Seven stocks.
Exchanging hands for $53, JEPQ is down 4.5% year-to-date and 2.7% in 12 months. It has a 30-day SEC yield of 14.47% and an expense ratio of 0.35%. The fund holdings include:
- Information Technology: 44%
- Other: 15.2%
- Communication Services: 13.2%
- Consumer Discretionary: 12.1%
Since the ETF is heavily inclined towards the tech sector, its top 10 holdings include the Magnificent Seven stocks like Amazon, Nvidia, Microsoft, Apple, Tesla (NASDAQ: TSLA), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), and Meta Platforms. The top two stock holdings, Nvidia and Microsoft constitute 15.71% of the portfolio and the top 10 stocks make up for 45% of the portfolio.
Tech stocks have generated impressive returns in the past which has allowed JEPQ to reward investors. The fund has generated an annualized 3-year return of 14.40% and an investment of $10,000 in 2022 would be worth $14,692 today.
When it comes to investing in JEPI or JEPQ, you can remain stress-free that the fund is managed by some of the best professionals at JP Morgan. Both ETFs have a diversified portfolio and a record of generating steady income for investors.
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