JEPI Vs. SPY: Will The Relative Outperformance Continue?

Summary

  • The JPMorgan Equity Premium Income ETF has outperformed the SPDR S&P 500 Trust ETF by 10% in relative terms YTD.
  • The outperformance was driven largely by the rotation from growth to value stock and aided by the use of option overlays.
  • Looking forward, I see the rotation to value has largely completed, and therefore, the outperformance is unlikely to continue.
  • This idea was discussed in more depth with members of my private investing community, Envision Early Retirement. Learn More »

Investment management. Portfolio diversification.

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Thesis

I have been writing a series of articles in the past year or so to caution readers about the potential risks of the JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI). To recap, many investors

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This article was written by

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** Disclosure** I am associated with Envision Research

I am an economist by training, with a focus on financial economics. After I completed my PhD, I have been professionally working as a quantitative modeler, with a focus on the mortgage market, commercial market, and the banking industry for more than a decade. And at the same time, I have been managing several investment accounts for my family for the past 15 years, going through two market crashes and an incredible long bull market in between. 

My writing interests are mostly asset allocation and ETFs, particularly those related to the overall market, bonds, banking and financial sectors, and housing markets. I have been a long time SA reader, and am excited to become a more active participator in this wonderful community! 


Disclosure: I/we have a beneficial long position in the shares of AAPL, ABBV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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