The 10-Year Treasury Just Touched 5%. This $45 Billion Fund Pays Nearly 8% and Hasn’t Missed a Monthly Check Since 2020. History Says Here’s What $100,000 Collects, and What It Gives Up

The JPMorgan Equity Premium Income ETF (NYSEARCA: JEPI), the $45 billion fund that has paid a check every month since it launched in May 2020, paid its 77th straight monthly distribution on November 4, $0.34683 a share, and $100,000 put into it the day after it listed has now collected $62,230 in cash. The shares themselves are worth $116,572 at Wednesday’s close of $58.21, and the last twelve checks work out to a 7.8% yield on that price, nearly 8%, in a week when the 10-year Treasury touched 5%. The same $100,000 in an S&P 500 index fund on the same day would be worth $257,647, plus $14,546 of dividends.

Six and a half years of history say the fund does exactly what it promises and charges for it in growth: it has paid every month, it lost about a fifth as much as the market in 2022, and it has given up about $80,000 of the S&P 500’s gains on the same $100,000 since launch. The limit of that reading is that the record holds one bear market, and the fund’s checks grew in the year the market fell, which is the year an income investor cares about most.

Here is what that record means for one holder. Dale, 70, is a retired utility lineman in Georgia. In 2019 a bank representative sold him a $350,000 fixed index annuity he still does not fully understand. In May 2020, a few weeks after the pandemic crash, he wanted monthly income without another contract, and he moved $100,000 of his $400,000 IRA into the new JPMorgan fund the day after it listed, at $49.94 a share. He and his wife Sharon, 68, are a scenario, and every figure below is computed from the fund’s own distribution record and daily prices.

What the fund does

JEPI holds about 135 large US stocks, chosen by JPMorgan’s managers for lower volatility than the S&P 500, and puts up to a fifth of the portfolio into equity-linked notes that sell call options on the index. The option premium is what makes the monthly check large. The price of that premium is the upside: when the S&P 500 rallies hard, the notes hand most of the gain to the option buyer. The fund charges 0.35% a year, and its stated aim is monthly income with returns similar to the S&P 500 at lower volatility.

Every check since launch

Dale’s $100,000 bought 2,002.6 shares. The fund has paid 77 distributions, one in every month from July 2020 through November 2026, and none was skipped.

The checks move with the market’s nerves. By calendar year the launch shares paid $8,333 in 2021, $12,741 in 2022, $9,249 in 2023, $8,444 in 2024, $9,452 in 2025, and $7,542 so far in 2026 through ten payments. The biggest year was the bear market, because frightened markets pay more for the call options the fund sells.

2022, the year it earned its keep

From the last close of 2021 to the last close of 2022, the fund lost 3.5% with distributions counted. The S&P 500 fund lost 18.2%. The fund’s share price fell 13.8% while the index fund’s fell 19.5%, and at the market’s lowest close that year, October 12, the index fund was down 24.9% from the start of the year against 19.5% for JEPI.

Someone who bought $100,000 of the fund on the first trading day of 2022, at $62.91, collected $10,113 in twelve checks that year and ended December with shares worth $86,616, a total of $96,729. The same $100,000 in the S&P 500 fund ended 2022 at $81,378 with its dividends counted. That is the year the fund’s holders point to, and the numbers support them.

The cost

Every other year the index won, and by a lot.

Over the six calendar years the fund beat the index once. Since launch, with every distribution reinvested, JEPI has returned 101.8% and the S&P 500 fund 181.8%: $100,000 became $201,813 in one and $281,797 in the other, a gap of $79,983, or about $80,000. Counted the way Dale actually holds it, with the checks taken as cash, the gap is wider, $93,392, because the index fund’s shares compounded while his did not. Since the end of 2022 alone, $100,000 in JEPI grew to $145,173 and the same money in the index fund to $208,299.

That gap is the fee for the check. JEPI’s 11.5% a year since launch is a good return for a fund built to lose less, and the S&P 500 fund’s 17.4% a year came with a 24.9% drawdown in 2022 that the fund’s holders did not have to sit through.

What $100,000 buys today

At Wednesday’s close, $100,000 buys 1,717.9 shares. The last twelve distributions total $4.5640 a share, a 7.8% trailing yield, and on those shares they would have paid $7,841 over the year, about $653 a month, ranging from $586 in October to $769 in May. The November check on those shares would have been $596. The same $100,000 in the S&P 500 fund paid $998 in dividends over the past twelve months, a yield of 1.0%.

The 10-year Treasury traded above 5% on Tuesday and ended the day near 4.99%, so a buyer today is taking a check nearly three points above the risk-free rate, one that moves every month, in exchange for the fund’s stock risk and a cap on the gains.

The account matters

Dale keeps the fund in his IRA, and that is the right place for it. Most of JEPI’s distribution comes from the option premium inside its equity-linked notes, which the fund passes through as ordinary income, taxed at his marginal rate in a brokerage account instead of the lower qualified-dividend rate. Inside the IRA the checks pile up untaxed until he withdraws them, and from age 73 his required minimum distributions can come out of that pile without selling a share.

Dale’s other reason for the fund was the annuity. The annuity pays a fixed amount the contract sets. JEPI’s check on his shares has ranged from $515 to $1,244 a month, and nobody guarantees next month’s. If you want a number you can count on to the dollar, the fund is not that product. If you want a check that has shown up 77 months running, that rose in the one bad year, and that leaves you owning stocks that can still grow, it has done that, at a cost of about $80,000 against the index on his $100,000.

The bottom line

JEPI paid its 77th straight monthly check on November 4. On $100,000 invested at launch it has paid $62,230 in cash and the shares are worth $116,572. In 2022 it lost 3.5% while the S&P 500 fund lost 18.2%. In every other year the index won, and the reinvested gap since launch is about $80,000. History says the fund buys a steadier monthly check with the market’s upside, and the holder has to decide which of the two they would rather have.

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