DIV 301Lesson 3 of 60 of 6
JEPI, JEPQ, QYLD, SPYI and DIVO
Five well known option income funds, five different engines under the hood.
What you’ll learn
- How JEPI, JEPQ, QYLD, SPYI and DIVO each generate their income
- Why their share prices have behaved so differently
- How each one's distributions are taxed
- Which kind of investor each design tends to suit
These five funds are among the most talked about income ETFs in America, and they’re often lumped together as “covered call funds.” In reality they’re five different machines. Here’s how each one works, with live data so you can see the results of each design.
Side by side
| JEPI | JEPQ | QYLD | SPYI | DIVO | |
|---|---|---|---|---|---|
| Manager | J.P. Morgan | J.P. Morgan | Global X | NEOS | Amplify |
| Launched | 2020 | 2022 | 2013 | 2022 | 2016 |
| Holds | Lower volatility S&P 500 stocks | Nasdaq-100 stocks | Nasdaq-100 stocks | S&P 500 stocks | About 25 to 35 dividend stocks |
| Options approach | Equity linked notes selling out of the money S&P 500 calls | Equity linked notes on the Nasdaq-100 | At the money Nasdaq-100 calls on the whole fund | S&P 500 index calls, often as call spreads | Selective calls on individual holdings |
| Upside kept | Some | Some | Very little | Some | Most |
| Distribution tax character | Mostly ordinary income | Mostly ordinary income | Varies by year: ordinary income, gains and return of capital; 60/40 on its index options | Often largely return of capital; 60/40 on its index options | Mix of qualified dividends and gains |
| Pays | Monthly | Monthly | Monthly | Monthly | Monthly |
Yields and returns, live
| Ticker | Name | Yield | Expense | 1Y total return | 5Y total return | 1Y price change |
|---|---|---|---|---|---|---|
| JEPI | JPMorgan Equity Premium Income ETF | 7.27% | 0.35% | +6.9% | +45.1% | -1.3% |
| JEPQ | JPMorgan Nasdaq Equity Premium Income ETF | 11.12% | 0.35% | +20.0% | n/a | +6.8% |
| QYLD | Nasdaq 100 Covered Call ETF | 11.38% | 0.61% | +23.3% | +57.0% | +9.3% |
| SPYI | NEOS S&P 500 High Income | 11.90% | 0.68% | +15.9% | n/a | +2.8% |
| DIVO | Amplify CWP Enhanced Dividend Income ETF | 4.83% | 0.56% | +12.5% | +72.0% | +5.3% |
| SPY | SPDR S&P 500 ETF Trust | 0.98% | 0.09% | +17.0% | +91.3% | +15.8% |
| QQQ | Invesco QQQ Trust ETF | 0.40% | 0.20% | +25.9% | +118.0% | +25.4% |
What happened to each share price
This table looks at each fund’s share price from the start of Dividend Duel’s price history for it, alongside the distributions it paid. It shows where each design’s return came from.
| Fund | Since | Price change | Paid out (per $100) | Cash return |
|---|---|---|---|---|
| JEPI | Jun 2020 | +12.3% | $61 | +73.6% |
| JEPQ | May 2022 | +19.8% | $50 | +70.1% |
| QYLD | Jun 2020 | -9.9% | $70 | +60.3% |
| SPYI | Aug 2022 | +9.7% | $49 | +59.0% |
| DIVO | Jun 2020 | +68.6% | $45 | +114.0% |
| QQQ | Jun 2020 | +223.1% | $7 | +229.7% |
| SPY | Jun 2020 | +157.8% | $14 | +172.0% |
The pattern lines up with the designs. The fund that gives away the most upside (QYLD) has seen its price slip, so nearly all its return came as distributions. Funds that keep more upside (DIVO, and to a degree JEPI, JEPQ and SPYI) paid less but saw their prices hold or grow. None of them kept pace with QQQ during a strong period for the Nasdaq-100.
Who each one tends to suit
- JEPI: someone who wants steady monthly income from US stocks with smaller swings than the market, and holds it in an IRA or accepts ordinary income tax.
- JEPQ: the same idea with more growth (and more volatility) from the Nasdaq-100, and a higher yield.
- QYLD: someone who wants the highest steady income from the Nasdaq-100 and has made peace with giving up nearly all of its growth.
- SPYI: a taxable account investor who wants high income with more favorable tax treatment, and understands return of capital.
- DIVO: someone who wants a dividend stock portfolio with an income boost, and cares about long-term growth as well as yield.
Next, the funds that pay every week by selling options that expire the same day: Weekly Paying and 0DTE Income ETFs.
Check your understanding
4 questionsWhich of these funds sells at the money calls on its entire index portfolio every month?
How does JEPI generate most of its option income?
Why are SPYI's distributions often taxed more lightly than JEPI's in a taxable account?
DIVO typically yields less than QYLD. What has it tended to offer in exchange?
Related lessons
Put it into practice
This lesson is for education only and isn’t financial, investment or tax advice. Tickers are used as examples of how things work, not as recommendations. Figures marked as live come from Dividend Duel’s market data and change daily. See our disclosure.