The JEPI ETF amid Market Volatility

Welcome back to AI in Investment Research & Finance.

In the previous edition of our newsletter, we encouraged long-term investors to use AI prompts to research and even challenge the old “Sell in May” adage. Here’s a quick recap of the key takeaways from Part I:

• The “Sell in May” effect has potentialaly faded, especially in the post-2008 era of macro-driven markets where investors also search for high-growth shares;
• In the rest of 2025, strong earnings, easing inflation and increasingly supportive central banks could likely encourage long-term investors to be invested in quality stocks within their risk/return profiles and without paying too much attention to short-term market volatility;
• Well-structured AI prompts can help evaluate seasonal strategies and surface overlooked risks or opportunities.

In this follow-up, we go a step further: How can investors stay smartly positioned, especially in uncertain or range-bound markets? One answer lies in exchange-traded funds (ETFs) that focus on high-yield, lower-volatility strategies, like the JPMorgan Equity Premium Income ETF (JEPI). In this edition, we break down how JEPI works, why it’s gaining traction in 2025 and how to use AI prompts to explore its strengths and weaknesses of its strategy under different market scenarios.

In recent weeks, we have also covered the following ETFs: MOAT and SPLV.

ETF Spotlight: JPMorgan Equity Premium Income ETF (JEPI)

When equity markets wobble, reliable income becomes increasingly important, especially for long-term investors. The JPMorgan Equity Premium Income ETF (JEPI) may deserve further research as it offers a structured response: monthly cash flow from blue-chip stocks, enhanced with a disciplined options overlay. In 2025, this mix of yield and lower volatility is drawing attention again, especially from investors looking beyond traditional bonds or growth-chasing strategies.

Quick Overview (as of May 14, 2025):

· Price: $56.03

· 52-week range: $49.94 to $60.88

· Dividend yield: 8.02%

· Expense ratio: 0.35% per year

Launched in May 2020, the JEPI fund combines large-cap U.S. equity exposure with a systematic covered call overlay, implemented via equity-linked notes. It sells out-of-the-money S&P 500 call options to generate monthly income, sacrificing some upside in exchange for smoother returns, especially during volatile or sideways markets.

The fund currently holds 128 positions, with no single stock exceeding a 2% allocation. Top sector exposures include information technology (15.8%), financials (13.7%), industrials (12.9%) and healthcare (11.3%). Leading holdings such as Visa (V), Mastercard (MA), Progressive (PGR), Trane Technologies (TT) and Microsoft (MSFT) reflect the portfolio’s tilt toward high-quality, lower-beta companies with stable fundamentals.

Performance and Role in 2025 Portfolios

At present, JEPI manages around $39 billion in assets and offers a 12-month trailing yield of around 8%. Its 30-day SEC yield, as of April 30, stands at 11%, far exceeding traditional bond ETFs like the iShares Core U.S. Aggregate Bond ETF (AGG), Vanguard Total Bond Market ETF (BND) and iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD).

Over the past 12 months the fund is down 1.8%, and has lost 2.6% year-to-date (YTD), having hit a new low in early April. For comparison, the SPDR S&P 500 ETF Trust (SPY) is up 0.13% YTD (or flat) and currently yields just 1.22%. This performance profile positions JEPI as a possible fund to explore for income-focused investors seeking equity participation with reduced volatility.

Caveats and Comparables

Covered call strategies are often overlooked by individuals due to their complexity. JEPI automates execution through institutional infrastructure and delivers access to income and lower equity beta without manual option management.

Comparable ETFs using similar structures include:

• Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD)

• Global X S&P 500® Covered Call ETF (NYSE:XYLD)

• Invesco S&P 500 BuyWrite ETF (NYSE:PBP)

As a final note, covered call ETFs like JEPI may offer steady income and lower volatility, but keep in mind that yields fluctuate with market conditions and the upside return potential is capped, which can limit performance in strong bull markets. As with any income vehicle, consider portfolio fit, risk tolerance and long-term goals, not just the yield.

🧠 AI Prompt for Further Exploration:

"Act as a senior portfolio strategist. Considering the JEPI ETF’s performance during past volatility spikes, such as in 2022, evaluate how this ETF might behave if current geopolitical or macroeconomic risks intensify in 2025. Discuss the structural strengths and limitations of covered call strategies during sharp bull markets versus volatile or range-bound periods. Include references to JEPI’s historical performance data, S&P 500 comparisons and relevant insights from JPMorgan’s official fact sheets, Morningstar or ETF Database."

📌 Purpose: To assess how JEPI’s income-plus-defensive approach may perform under future stress scenarios, and when its option overlay might limit upside participation.

📈 Final Thoughts

In times of volatility, staying invested doesn't need to mean staying exposed to exteme volatility. Structured ETFs like JEPI—especially when paired with targeted AI prompts—can help investors manage risk and generate income. As always, flexibility and thoughtful research outperform reactive short-term moves.

Stay tuned for next week’s edition, where we’ll explore other effective AI prompting techniques tailored to sector-specific analysis and smarter investment research.

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🚀 AI Career Moves: Exciting AI Jobs This Week

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📊 Upcoming Key Earnings (May 14 – May 20)

Markets are heading into a critical earnings stretch. Here’s the day-by-day breakdown of major reports to watch:

Wednesday, May 14:

• Tencent Holdings (TCTZF/TCEHY): Q1 2025 Earnings Release

• Cisco Systems (CSCO): Q3 2025 Earnings Release

• Sony Group (SONY): Full Year 2025 Earnings Release

Thursday, May 15:

• Walmart (WMT): Q1 2026 Earnings Release

• Alibaba Group Holding (BABA): Full Year 2025 Earnings Release

Friday, May 16:

• Fuji Media Holdings (FJTNY): Full Year 2025 Earnings Release

• RLX Technology (RLX): Q1 2025 Earnings Release

Saturday, May 17:

• Odyssey Marine Exploration (OMEX): Q1 2025 Earnings Release

• Reliance Global Group (RELI): Q1 2025 Earnings Release

Monday, May 19:

• Ryanair Holdings (RYAAY/RYAOF): Full Year 2025 Earnings Release

• Macy's (M): Q1 2025 Earnings Release

Tuesday, May 20:

• Home Depot (H): Q1 2025 Earnings Release

• Palo Alto Networks (PANW): Q3 2025 Earnings Release

• Vodafone Group (VOD): Full Year 2025 Earnings Release