Updated Reviewed quarterly
JEPI vs SCHD: Income ETF Showdown
JEPI
TER 0.35% · Yield 8.3% · 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 (8.3%) 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:
- ✓ 8.3% 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) | 8.3% | 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
$8,290/year
~$691/month (distributed monthly)
8.3% 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 8.3% 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 ~$1,244/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 (8.3%)
- 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
Related to JEPI vs SCHD
JEPI ETF detail
Full JEPI guide for NZ investors.
SCHD ETF detail
Full SCHD guide for NZ investors.
SCHD vs VYM
Two dividend-growth ETFs head-to-head.
Dividend ETFs for NZ compared
Curated dividend-income picks.
NZ-listed dividend ETFs (PIE-tax)
NZX-listed alternatives without FIF.
How to buy US ETFs from NZ
Platforms supporting JEPI + SCHD.
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