What is the difference between JEPI and JEPQ?

Both are JPMorgan covered-call income ETFs with the same structure — equity holdings + sold call options for monthly premium income. JEPI is built on S&P 500 stocks (broader sector exposure); JEPQ is built on Nasdaq-100 stocks (concentrated tech: Apple, Microsoft, Nvidia, etc). JEPQ has higher distribution yield because Nasdaq stocks have higher implied volatility, which generates richer option premiums. JEPI has more sector diversity.

Which has the higher yield, JEPI or JEPQ?

JEPQ has the higher trailing 12-month distribution yield (~9.0% vs JEPI ~7.5%). The yield differential is driven by the higher implied volatility of Nasdaq-100 names — covered-call writers collect richer premiums on more volatile underlyings. Both pay monthly distributions.

What is JEPQ's expense ratio?

JEPQ charges 0.35% per year — same as JEPI. Both are actively managed funds with covered-call overlays, which justifies the higher fee than passive index ETFs (e.g. VOO 0.03% or QQQM 0.15%).

Do JEPI and JEPQ underperform in bull markets?

Yes — by design. The covered-call overlay caps upside in exchange for premium income. In sustained bull markets, both lag their underlying indexes (JEPI vs S&P 500; JEPQ vs Nasdaq-100) by 3-6%/year on total return. JEPQ's underperformance is more pronounced in tech-led rallies (e.g. 2023-2024). In flat or sideways markets, both tend to outperform their indexes thanks to premium income.

How are JEPI and JEPQ taxed in New Zealand?

Both are US-domiciled ETFs subject to NZ Foreign Investment Fund (FIF) rules above NZ$50,000 cost basis. Distributions also incur 15% US withholding tax (with a W-8BEN). The covered-call premium income may not qualify for the reduced US treaty rate the same way ordinary dividends do — confirm with your broker's annual tax statements.

Should I hold both JEPI and JEPQ?

Holding both gives sector-diversified exposure to the covered-call income strategy. JEPI provides broader US large-cap exposure (financials, industrials, healthcare, tech); JEPQ tilts the income portfolio toward tech. Whether the diversification justifies holding two funds depends on portfolio size and your existing equity allocation. Investors with significant non-tech exposure elsewhere may prefer JEPQ alone for its higher yield.

Updated 2026-05-04 Reviewed quarterly

JEPI vs JEPQ: S&P vs Nasdaq Income

JEPI

TER 0.35% · Yield 7.5% · Monthly

JEPQ

TER 0.35% · Yield 9.0% · Monthly

Same JPMorgan covered-call income strategy, two different equity baskets. Which one fits your portfolio?

Key difference

Same strategy, different equity baskets. JEPI is built on S&P 500 stocks (sector-diversified — financials, healthcare, industrials, tech). JEPQ is built on Nasdaq-100 stocks (concentrated in tech: Apple, Microsoft, Nvidia, Amazon, Meta). Higher implied volatility on Nasdaq-100 names lets JEPQ generate richer option premium and a higher distribution yield, at the cost of higher concentration risk.

Two equity baskets, same overlay

JEPI — S&P 500 + covered call

Broader US large-cap exposure with sector diversity:

✓ ~7.5% yield, monthly distributions
✓ Spread across ~11 GICS sectors (financials ~17%, healthcare ~14%, industrials ~9%, tech ~28%)
✓ Lower equity-volatility profile than JEPQ
✗ Lower yield because lower underlying volatility = lower option premiums

JEPQ — Nasdaq-100 + covered call

Tech-tilted exposure with higher implied volatility:

✓ ~9.0% yield, monthly distributions
✓ Concentrated in tech mega-caps (top 10 = ~50% of portfolio)
✓ Richer option premiums from higher implied volatility
✗ Higher concentration risk; underperforms more in tech-led rallies

Head-to-head comparison

Feature	JEPI	JEPQ
Equity basket	S&P 500 (sector-diversified)	Nasdaq-100 (tech-tilted)
TTM Yield	7.5%	9.0%
Distribution frequency	Monthly	Monthly
Expense ratio	0.35%	0.35%
Strategy	Equity + covered calls	Equity + covered calls
Concentration	~500 holdings	~100 holdings (tech-heavy)
Suited to	Diversified income seekers	Tech-tilted income seekers

For New Zealand investors

Both fall under FIF

Both are US-domiciled ETFs. Above NZ$50,000 cost basis, FIF rules apply — most NZ investors use the FDR method (5% × opening market value × marginal rate). FDR vs CV method →

US withholding on distributions

Both apply 15% US withholding tax under the NZ–US tax treaty (with a W-8BEN). Note that JEPQ's higher yield means more dollar-tax withheld — on NZ$100,000, ~NZ$1,350/yr withheld vs ~NZ$1,125 on JEPI. Both are claimable as foreign tax credits on your IR3.

Covered-call income tax classification

Premium income from covered calls may not qualify for the reduced US treaty withholding rate the same way ordinary dividends do. Your broker's annual tax statement should split the distribution between qualified dividends, ordinary income, and return of capital — work with a NZ tax adviser if your portfolio is sizeable.

Which one suits which investor

Suited to JEPI

Income seekers wanting sector-diversified US large-cap exposure
Investors with existing tech-heavy holdings elsewhere (avoid double-up)
Portfolios prioritising lower equity-volatility profile

Suited to JEPQ

Income seekers comfortable with concentrated tech exposure
Higher current-yield priority (~1.5% pickup over JEPI)
Investors expecting flat or modest tech returns (covered-call premium = upside)

These are general product characteristics, not recommendations. Consult a licensed financial adviser to assess suitability for your circumstances.

Learn more about these ETFs

Both available on NZ investment platforms

JEPI guide JEPQ guide How to buy from NZ →

JEPI vs JEPQ: S&P vs Nasdaq Income

Key difference

Two equity baskets, same overlay

JEPI — S&P 500 + covered call

JEPQ — Nasdaq-100 + covered call

Head-to-head comparison

For New Zealand investors

Both fall under FIF

US withholding on distributions

Covered-call income tax classification

Which one suits which investor

Suited to JEPI

Suited to JEPQ

Learn more about these ETFs

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