Why JEPI, QQQ and VTI Are Low Risk Ways To Make Solid Returns
For beginners, investing in exchange-traded funds (ETFs) is a good way to invest in a large bunch of stocks at low risk. When you invest in an ETF, you’re buying a share of a portfolio that will reflect the performance…
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For beginners, investing in exchange-traded funds (ETFs) is a good way to invest in a large bunch of stocks at low risk. When you invest in an ETF, you’re buying a share of a portfolio that will reflect the performance of the underlying index. Say an ETF tracks the S&P 500 index; then its value will increase or drop based on the performance of the companies included in the index.
You’ll be able to own 500 of the largest U.S. companies at low cost and with minimal research. You’ll not have to worry about a stock going up or down because an ETF is highly diversified and has low weightage on a single stock. If you’re looking for ETFs to generate steady returns at low risk, JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI), Invesco QQQ Trust (NASDAQ:QQQ), and Vanguard Total Stock Market Index Fund ETF (NYSEARCA:VTI) are worth considering.
JPMorgan Equity Premium Income ETF
The JPMorgan Equity Premium ETF is a covered call ETF that tracks the S&P 500. It holds close to 100 stocks of the biggest U.S. companies and is a covered call. JEPI uses a combination of covered calls and equity-linked notes to generate income. It invests about 80% in stocks from the S&P 500 and the remainder in equity-linked notes that provide exposure to written call options on the index. This allows it to offer an attractive dividend of 8.6%.
With JEPI, your returns will exceed the returns from Treasury bills and bonds. The ETF holds 125 stocks and has the highest allocation in the information technology sector (15.8%), followed by financials (13.5%) and industrials (11.8%). Its top 10 holdings include the Magnificent Seven in addition to strong companies like Oracle, AbbVie, and Mastercard.
JEPI pays monthly dividends, and its most recent dividend was $0.368. The fund has generated a cumulative 3-year return of 34.15%, and a 5-year return of 63.39%. JEPI is a premium ETF with a low expense ratio of 0.35% and a sizeable yield that makes up for the operating expenses.
Invesco QQQ Trust
The Invesco QQQ Trust has been a top choice for investors for many years. It tracks the Nasdaq 100 index and has shown impressive performance. It has generated a trailing return of 20.27% in a year, 14.76% in 5-years, and 19.42% in 10 years. QQQ owns large-cap stocks, which have a strong history of performance. Since its launch in 1999, the fund has generated 494.5% higher returns than the S&P 500.
QQQ is a tech-focused fund with an allocation of 60% in the sector, followed by 19.44% in consumer discretionary and 4.8% in healthcare. The fund’s highest allocation lies in Nvidia, with a weightage of 9.68%. The top 10 holdings form 53% of the total fund, and they include the Magnificent Seven and other companies like Netflix and Broadcom.
QQQ has a low expense ratio of 0.20%, and the fund is rebalanced each quarter. Since the fund is inclined heavily towards the tech sector, it will see volatility during sector ups and downs. However, QQQ rebalances regularly and has managed to outperform the broader market, showing resilience and strength during uncertainties. It is a low-cost way to make the most of the tech upside.
Vanguard Total Stock Market Index Fund ETF
The Vanguard Total Stock Market ETF is a heavily diversified fund that holds over 3,000 stocks. It has a yield of 1.14% and tracks the performance of the CRSP US Total Market Index. VTI invests in large-, mid-, and small-cap companies and has a low expense ratio of 0.03%.
It holds 3,524 stocks, and you’ll notice popular names like Apple and Coca-Cola but also many small-cap stocks. Some of the lesser-known companies include Emergent BioSolutions and Natural Gas Services Group.
VTI also has the highest exposure to the information technology sector (36.6%), followed by consumer discretionary (14.5%) and industrials (12.70%). Its top 10 holdings include the Magnificent Seven, but it also holds other tech giants like Palantir, Oracle, Advanced Micro Devices, and Cisco.
If you’re looking for a well-diversified portfolio, VTI will not disappoint. It has generated a cumulative return of 15.74% in 1 year, 67.57% in 3 years and 92.89% in 5 years. The fund’s 10-year return is 268.58%. It has had an impressive run and offers ultimate diversification at low cost. In 2025, the NAV is up 14.04% and trading for $329, at its 52-week high.
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Vandita Jadeja is a financial publisher with over a decade of experience writing about financial topics, including investment, savings, retirement, insurance and banking. Vandita is a Chartered Accountant who loves to debunk financial concepts for readers.
Her work has appeared on sites that include The Motley Fool, InvestorPlace, and Benzinga. She covers investing and focuses on stock picks and price prediction for 24/7 Wall St.
When not looking for the next stock investment opportunity, she can be found traveling, reading, chasing sunsets and enjoying her iced latte.
