The Best Dividend ETF Passive Income Investors Love
Here is a look at the one ETF that passive income investors now consider to be the best of all. Two of the top portfolio managers at JPMorgan run it.
24/7 Wall St. Insights
- Exchange-traded funds (ETFs) have numerous advantages over open-end mutual funds
- Some top ETFs pay monthly dividends, while most pay quarterly, a plus for passive income investors
- Grab this free report today: Access 2 legendary, high-yield dividend stocks Wall Street loves.
Unlike open-end mutual funds, exchange-traded funds (ETFs) trade on major exchanges like stocks. They own financial assets such as stocks, bonds, currencies, debts, futures contracts, and commodities such as gold bars. One massive advantage ETFs have is that they can be bought or sold anytime the markets are trading.
According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade or business in which the individual does not materially participate. It can also include income from limited partnerships and other similar enterprises where the individual is not actively involved.
Investors, especially those nearing or in retirement, increasingly seek passive income streams to supplement social security, pension income, or qualified retirement account withdrawals.
We screened our 24/7 Wall St. passive income ETF database, looking for the one fund that many investors consider the best of all. After some careful consideration, one mammoth fund run by one of the top Wall Street investment banks is the clear winner. It is also the best dividend ETF passive income investors love. Don’t forget to grab this awesome free report that highlights dividend legends.
JPMorgan Equity Premium Income ETF
With a stunning $33.74 billion of assets under management, JPMorgan Equity Premium Income ETF (NYSEArca: JEPI) is the world’s largest actively managed ETF. It continues to take in billions since its inception in 2020 and is run by two of the top portfolio managers at JPMorgan. The two managers, Hamilton Reiner and Raffaele Zingone, have a combined 70 years of investment experience.
The fund seeks to achieve its investment objectives by:
- Creating an actively managed portfolio of equity securities comprised significantly of those included in the fund’s primary benchmark, the Standard & Poor’s 500 Total Return Index (S&P 500 Index)
- Through equity-linked notes (ELNs), selling call options with exposure to the S&P 500 Index
- Dividend yield = 7.35% paid monthly
- NAV = $55.37
- Expense ratio = 0.35%
This is how the JPMorgan fact sheet describes the funds approach to investing and objectives:
- Generates income through a combination of selling
options and investing in U.S. large cap stocks, seeking to
deliver a monthly income stream from associated option
premiums and stock dividends - Constructs a diversified, low volatility equity portfolio
through a proprietary research process designed to
identify over- and undervalued stocks with attractive
risk/return characteristics - Seeks to deliver a significant portion of the returns
associated with the S&P 500 Index with less volatility, in
addition to monthly income
The fund has a four-star rating from Morningstar and is classified in the Derivative Income category.
Here are the top 10 stock holdings in the fund:
- Microsoft
- Amazon
- Trane Technologies
- Meta Platforms
- Progressive Corporation
- Intuit
- Alphabet
- Mastercard
- Southern Company
- AbbVie
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
