JEPI: A 12% Yielding 'Retirement Dream ETF' With A Catch

Summary

  • JEPI was the 8th most popular ETF of 2022, and its 12% yield, paid monthly, has created a firestorm of investor interest.
  • Since inception, JEPI has delivered an average yield of 9.3% and 13.4% annual returns, but with 37% less volatility than the S&P and with 50% smaller peak declines.
  • Some investors consider it a "miracle" retirement ETF, but there are important things all investors need to know before buying it.
  • According to management, JEPI is designed to deliver 5% to 8% yield over time, and 6% to 10% annual returns, 85% that of the S&P 500, with 35% lower volatility.
  • 80% to 85% of JEPI's dividends are taxed as ordinary income, which means as much as 50% of the yield could go to the IRS if owned in a taxable account where the investor is in the highest tax bracket.
  • I do much more than just articles at The Dividend Kings: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
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Deagreez

This article was published on Dividend Kings on Monday, January 23rd, 2023.

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This article was written by

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Adam Galas is a co-founder of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 5,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.


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I'm a proud Army veteran and have seven years of experience as an analyst/investment writer for Dividend Kings, iREIT, The Intelligent Dividend Investor, The Motley Fool, Simply Safe Dividends, Seeking Alpha, and the Adam Mesh Trading Group. I'm proud to be one of the founders of The Dividend Kings, joining forces with Brad Thomas, Chuck Carnevale, and other leading income writers to offer the best premium service on Seeking Alpha's Market Place.


My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives.


With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and safe and dependable income streams in all economic and market conditions.


Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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