What is the difference between JEPI and SCHD?

JEPI generates income via covered-call options on US large-cap stocks (yield 7.5%, monthly distributions, 0.35% TER). SCHD holds 100 quality US dividend stocks with 10+ year payout history (yield 3.5%, quarterly distributions, 0.06% TER). JEPI prioritises current income; SCHD prioritises dividend growth.

Which has the higher dividend yield, JEPI or SCHD?

JEPI yields 7.5% trailing 12-month (paid monthly via covered-call premium plus stock dividends). SCHD yields 3.5% (paid quarterly from its 100 dividend-equity holdings).

What is JEPI's expense ratio?

JEPI charges 0.35% per year. That is materially higher than SCHD (0.06%) but lower than most actively-managed equity-income mutual funds.

Does JEPI underperform in bull markets?

Yes — by design. JEPI sells covered calls on its underlying portfolio, capping upside in exchange for income. In sustained bull markets it has historically lagged the S&P 500 on total return; in flat or sideways markets it has tended to outperform. See the issuer fact sheet for current period figures.

How are JEPI and SCHD taxed in New Zealand?

Both are US-domiciled ETFs subject to NZ Foreign Investment Fund (FIF) rules once your overseas-share holdings exceed the de minimis threshold. Distributions also incur US dividend withholding tax under the NZ-US tax treaty. JEPI distributions are partly ordinary income and partly return of capital — the mix changes year to year.

JEPI distribution frequency — monthly or quarterly?

Monthly. JEPI pays distributions every month, which suits investors targeting steady cash flow.

Updated 2026-05-02 Reviewed quarterly

JEPI vs SCHD: Income ETF Showdown

JEPI

TER 0.35% · Yield 7.5% · Monthly

SCHD

TER 0.06% · Yield 3.5% · Quarterly

High current yield or growing dividends? Two very different approaches to income investing.

Key Difference

JEPI offers higher current yield (7.5%) through covered call strategies. SCHD focuses on dividend-growth equities (3.5% yield) with quality dividend-paying stocks. Different investors may prioritise immediate income vs long-term dividend growth depending on their circumstances.

Fundamentally Different Strategies

JEPI - Maximum Current Income

Uses covered call options to generate high income:

✓ 7.5% yield paid monthly
✓ Historically lower volatility than S&P 500
✗ Capped upside in bull markets
✗ Income can vary month to month

SCHD - Dividend Growth

Invests in quality dividend growers:

✓ 3.5% yield with multi-year dividend-growth history
✓ Full upside participation
✓ Historically higher total returns
✗ Lower current income

Head-to-Head Comparison

Feature	JEPI	SCHD
Current Yield (TTM)	7.5%	3.5%
Distribution Frequency	Monthly	Quarterly
Expense Ratio	0.35%	0.06%
Growth potential	Capped by covered-call overlay	Full upside
Dividend-growth history	Variable (option premium driven)	Multi-year track record
Typical use	Current income	Long-term dividend-growth investing

Worked example — NZ$100,000 invested

Illustrative only — gross income, before US withholding tax, fees, and FIF.

JEPI — year-1 gross income

$7,500/year

~$625/month (distributed monthly)

7.5% TTM yield × NZ$100,000 principal. Income is variable — covered-call premium moves with volatility, and SoQ classification (ordinary income vs return of capital) varies year to year.

SCHD — year-1 gross income

$3,500/year

~$292/month equivalent (distributed quarterly)

3.5% TTM yield × NZ$100,000 principal. SCHD has a multi-year history of growing distributions; we do not project forward growth rates here.

For New Zealand Investors

US withholding tax — higher-yield ETFs withhold more

JEPI's 7.5% yield means more dividends pass through US withholding (W-8BEN reduces the rate from 30% to 15% under the NZ-US treaty). On NZ$100,000, that's ~$1,125/year withheld vs ~$525 for SCHD. The withheld amount can be claimed as a foreign tax credit on your IR3.

FIF method choice

Both ETFs sit in NZ's Foreign Investment Fund regime above the de minimis threshold. The FDR method (deemed 5% × opening market value) vs CV method (actual gain) outcome depends on each year's price + distribution path — neither ETF is structurally favoured. See FDR vs CV method.

NZD income volatility

Both pay in USD. JEPI's higher yield means NZD/USD exchange-rate variance has a bigger impact on your actual income in NZ dollars.

Key Differences

JEPI Characteristics

Higher current yield (7.5%)
Monthly distributions
Historically lower volatility, but capped upside
Higher expense ratio (0.35%)

SCHD Characteristics

Lower current yield (3.5%) with multi-year dividend-growth history
Full upside market participation
Lower expense ratio (0.06%)
Quality-screened dividend equities

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

Learn More About These ETFs

Both ETFs available on NZ investment platforms

Learn About JEPI Learn About SCHD How to buy from NZ → NZ-listed (PIE-tax) alternatives →