High current yield or growing dividends? Two very different approaches to income investing.
JEPI offers higher current yield (~7%+) through covered call strategies. SCHD focuses on dividend growth (~3.5% yield) with quality dividend-paying stocks. Different investors may prioritise immediate income vs long-term dividend growth depending on their circumstances.
Uses covered call options to generate high income:
Invests in quality dividend growers:
| Feature | JEPI | SCHD |
|---|---|---|
| Current Yield | ~7.5% | ~3.5% |
| Distribution Frequency | Monthly | Quarterly |
| Expense Ratio | 0.35% | 0.06% |
| Growth Potential | Limited (capped) | Full upside |
| Dividend Growth | Variable | ~12%/year |
| Typical Use | Current income needs | Long-term wealth building |
$7,500/year
~$625/month in income
Income may decrease over time if market rises (opportunity cost)
$3,500/year
~$290/month in income
But dividends grow ~12%/year → $11,000+/year by year 10
If SCHD's dividends grow at 12%/year, it will match JEPI's income in about 7-8 years, then surpass it. If you have a long time horizon, SCHD's growing income becomes more valuable.
JEPI's 7.5% yield means more dividends subject to 15% US withholding. On $100,000, that's ~$1,125/year withheld vs ~$525 for SCHD.
SCHD's higher total returns may result in more FIF tax under the CV method. JEPI's lower growth could mean lower FIF under FDR method.
Both pay in USD. JEPI's higher yield means NZD/USD exchange rate fluctuations have bigger impact on your actual income in NZ dollars.
These are general product characteristics, not recommendations. Consult a licensed financial adviser to assess suitability for your circumstances.
Both ETFs available on NZ investment platforms