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Hey dividend income investors! Over the past few months, I’ve been keeping a close eye on JEPI and JEPG, and if you’ve read my earlier posts, you’ll know I’ve been genuinely excited about these covered call strategy ETFs boosting my passive income.

Back then, I shared why JEPI’s new listing on the London Stock Exchange was a big win for Singapore investors — removing the 30% US withholding tax on the dividends paid — and how JEPG opens the door to global dividend exposure beyond just the US market.

But this month, my excitement surged even further — because something extraordinary just happened.

The latest dividend yields have surged past 15% per annum for both JEPI and JEPG. Yes — fifteen percent.

It’s not every day you see a jump like this in two of the most popular income ETFs. So in today’s post, we’re going to unpack exactly what’s going on. I’ll break down what’s driving these sky-high yields, how these ETFs actually work, and whether this is a sign of strength… or a red flag.

And of course, I’ll share whether I’m buying more — or holding back.

Before we dive in, let me remind you that this post is for informational purposes only and not financial advice. Always do your own research and consult a licensed financial adviser before making any investment decisions. I own the ETFs discussed, but what works for me might not work for you.

Alright, let’s get started!

What Exactly Are JEPI and JEPG?

Let’s start by taking a deeper look at what JEPI and JEPG actually are, because understanding their structure is key to understanding why their yields have spiked recently.

Both JEPI and JEPG are part of J.P. Morgan’s Equity Premium Income ETF series. These ETFs are designed to do two things:

1. Provide high monthly income,
   
2. While maintaining lower volatility compared to traditional equity investments.

They achieve this through a strategy known as the covered call strategy, which I’ll explain in a moment.

JEPI: Focused on the US

JEPI – the J.P. Morgan Equity Premium Income ETF – focuses on large-cap U.S. stocks with strong fundamentals and lower volatility. Around 80% of JEPI’s portfolio is invested in these quality U.S. equities.

The remaining 20% is used to implement its covered call strategy — but it does so in a slightly different way than most ETFs. Instead of writing the options directly, JEPI uses something called Equity-Linked Notes (or E.L.N.). These E.L.N. are essentially structured products that allow JEPI to generate option premiums, which form a big part of the ETF’s monthly payouts.

This structure gives JEPI the ability to 1) Deliver high income through premiums collected from options; 2) Smooth out volatility; and 3) provide consistent monthly distributions — historically ranging from 6% to 12% per annum, depending on market conditions.

But of course, the trade-off is that JEPI gives up some of the capital upside during market rallies, because of the nature of its call option strategy.

JEPG: The Globally Diversified

Now let’s move on to JEPG — the J.P. Morgan Global Equity Premium Income ETF.

JEPG uses the same core strategy as JEPI, but with a global twist.

Instead of being limited to US stocks, JEPG invests across developed markets, including, the U.S. (currently about 68%), Europe (around 18%), and the Asia-Pacific region (about 14%), with exposure to Japan, Singapore, and Hong Kong.

This global reach gives JEPG a few important advantages. First, geographical diversification – it reduces reliance on just the U.S. market. Second, exposure to value sectors in Europe and Japan, which have been relatively more resilient in recent months. And finally, greater flexibility to rotate away from expensive sectors like US tech into more defensive global sectors like healthcare, telecom, and consumer staples.

Like JEPI, JEPG uses a covered call strategy to generate monthly income, but it selects its stocks using a bottom-up, fundamentally driven process — seeking undervalued companies with good risk/reward characteristics on a global basis.

So while JEPI gives you a stable, income-generating portfolio of U.S. stocks, JEPG offers a similar income approach but with broader global exposure, which can be useful in times when the U.S. is underperforming or overvalued.

Why the LSE Listings Matter for Singapore Investors

One more point that’s especially important for Singapore-based investors.

Both JEPI and JEPG are now listed on the London Stock Exchange (or L.S.E.) and domiciled in Ireland. This is significant because it removes the 30% U.S. withholding tax that applied to U.S.-listed versions of these ETFs.

So as Singapore investors, by buying the LSE-listed versions, we can access these same income-generating strategies, but with much greater tax efficiency. That makes the already attractive dividend yields even more powerful — because we’re getting to keep the full distribution without giving up a chunk to Uncle Sam.

Why Are the Yields Suddenly So High?

So, why are the dividend yields for JEPI and JEPG suddenly so high?

Let’s talk numbers first. For JEPG, the latest dividend was USD 0.3369, translating to an annualised yield of 16.03%.

For JEPI, the latest dividend came in at USD 0.2847, giving an annualised yield of 15.09%.

Now to be clear, these are annualised based on the latest monthly payouts — and yields can change month to month. But still, this is a massive jump compared to just a few months ago, when both ETFs were yielding closer to 6% to 9%.

So what’s going on?

In one word: volatility.

The past two months have been particularly volatile across both U.S. and global markets — and here’s why.

First, we had the US tariff scare in April and May. The sudden announcement of new global tariffs — and the possibility of retaliation — spooked investors, especially in export-sensitive sectors like tech and manufacturing.

Then came conflicting economic data. Strong U.S. labor market numbers reduced hopes for a July rate cut by the Fed, while inflation figures remained sticky. That confused investors in the bond market, which had been betting heavily on easing.

On top of that, global political risk has risen. There’s renewed uncertainty around European elections, escalating Middle East tensions, and concerns over policy stability in the U.S., especially with the upcoming presidential cycle.

All this has led to elevated market volatility — and that’s actually good news for covered call ETFs like JEPI and JEPG.

Here’s why: Higher volatility = higher option premiums = higher income.

Both JEPI and JEPG sell call options on their stock holdings to generate income. When volatility surges, the value of those options — and the premiums they can collect — rises substantially.

And that’s what we’re seeing reflected in the latest payouts.

But of course, while it’s great to see a 15% yield printed on the fact sheet, we have to ask ourselves — is it sustainable, or is this just a temporary spike?

That’s what we’ll unpack next.

A Reminder on the Covered Call Trade-Off

Let’s take a step back and revisit the mechanics of the covered call strategy, because this is at the heart of how both JEPI and JEPG deliver such high income. But if you’re already familiar with the strategy, feel free to jump ahead.

The core idea is simple: these ETFs own a portfolio of dividend-paying stocks and sell call options on a portion of those holdings. The option buyers pay a premium for the right — but not the obligation — to buy those stocks at a pre-agreed price in the future.

Those option premiums are then collected by the ETF and distributed to investors as part of the monthly dividend.

This strategy works especially well when markets are trading sideways — not much capital upside, but the ETF still earns from option premiums. Or if market is volatile, it will also do well — like the past two months, where option premiums shoot up and income spikes.

But of course, there’s a trade-off.

When markets go on a strong rally, covered call ETFs typically underperform, because their upside is capped. If the underlying stocks rise sharply beyond the strike price, the ETF gives up further gains — since the shares may be “called away” at a lower price.

So in essence, you’re exchanging some capital appreciation potential for more consistent income.

And while 15% yield sounds incredibly attractive — and yes, it’s a big headline number — it’s important to remember that it doesn’t mean 15% total return. The capital upside is constrained by design.

That’s not necessarily a bad thing. For many income-focused investors — especially those who want steady monthly payouts — this strategy is exactly what they’re looking for. But it’s important to go in with eyes open.

How Do JEPI and JEPG Compare to Their Benchmarks?

One question that always comes up with high-yield ETFs like JEPI and JEPG is this:

“If I’m already investing in the S&P 500 or a global ETF like VWRD, why would I need these? Wouldn’t I be better off just sticking to the benchmark?”

It’s a fair question — and that’s why it’s useful to look at how JEPI and JEPG have actually performed this year, not just in price, but in total returns including their monthly dividend payouts.

But before we dive into performance numbers, if you’ve found the explanation helpful so far, do this introvert uncle a small favor — give this post a quick thumbs up. It really helps more investors discover dividend strategies like this. And if you’re new here, welcome — hit subscribe and join the community of long-term, income-focused thinkers.

Let’s start with JEPI.

So far in 2025, JEPI’s share price is down -0.4% year-to-date, while the S&P 500 index is up +6.8%. That might make it look like JEPI is underperforming badly — if you ignore the income.

But let’s add the dividends back in. Based on the actual distributions from January to June this year, JEPI’s average annualised yield was about 7.17%. That translates to roughly 3.6% income received in the first half of the year.

Add that to the -0.4% capital return, and JEPI’s total return year-to-date comes in at approximately +3.2%.

Not spectacular — but it paints a more balanced picture. Especially when you consider that JEPI is designed for income and stability, not maximum capital growth.

Now on to JEPG.

JEPG’s price is up about +4.0% year-to-date, while its benchmark, the VWRD global ETF, is up +9.2%. So once again, it appears to lag on capital alone.

But here’s the kicker: JEPG’s average annualised dividend yield for the first 6 months of the year was 8.08%, which translates to about 4.04% of income earned in the first half.

That brings JEPG’s total return year-to-date to roughly +8.04% — narrowing the gap with VWRD, and doing so with less volatility.

In fact, one of the biggest advantages of JEPG — and something I don’t want you to overlook — is just how much more stable it’s been compared to its benchmark, VWRD.

If you look at the price chart, especially during the April and May sell-off, the difference is striking. VWRD had deep swings and sharp recoveries — while JEPG moved in smaller, steadier steps, with far less drama.

And that really matters. Because as dividend investors, we’re not just chasing the highest return — we’re looking for predictability, stability, and peace of mind. Especially if you’re relying on income for expenses or reinvestment, it helps when your portfolio isn’t swinging wildly every week.

So even though JEPG didn’t beat VWRD in pure capital gains, it has delivered almost comparable total returns — but with significantly less volatility. And that’s the kind of trade-off many income investors, myself included, are happy to accept.

Is This 15% Yield Sustainable?

Now of course, the big question is — how sustainable are these double-digit yields?

The short answer: they’re likely not permanent but it could feature more frequently going forward.

Remember, the spike in JEPI and JEPG’s dividend yields is driven primarily by higher volatility in recent months. The more volatile the market, the higher the premiums they can collect from selling call options. And those premiums are what fund a large part of the monthly payouts.

But as volatility drops — say, with the market rebound — the option income will come down too, and so will the yields. In other words, these 15% yields are a reflection of market conditions, not a new baseline.

That said, even in calmer markets, JEPI and JEPG have typically delivered 6% to 8% yields, which is still well above the average for most equity ETFs.  

So while we shouldn’t expect 15% to last forever, these ETFs can still serve a useful role as reliable income generators, especially when positioned alongside more traditional dividend holdings. And given the ongoing uncertainties around trade, tariffs, and geopolitical risks which reached a 35-year high, I think it’s likely we’ll continue to see periods where volatility spikes — and with it, elevated dividend yields from these ETFs. 

The Dividend Uncle’s Take

So, now that we’ve looked at the numbers — and acknowledged that these 15% yields might not last — how do I personally view JEPI and JEPG?

To me, both ETFs are still very valuable components of my dividend portfolio. Yes, the yields might come down if volatility subsides, but even at more typical levels of 6% to 8%, they remain attractive sources of monthly income — and importantly, they come with lower volatility compared to their benchmarks.

In fact, I think of them as income boosters that activate in times of market stress. When things get choppy, they don’t just survive — they generate even more cash flow. That makes them useful not just for yield, but as diversifying income tools alongside core holdings like REITs and dividend stocks.

Now, between the two, I’ve been leaning more toward JEPG — and here’s why.

While JEPI is backed by a solid portfolio of U.S. large caps, the S&P 500 feels richly valued at the moment, especially with big tech stocks running hot again. On the other hand, JEPG gives me global diversification — with exposure to Europe and Asia-Pacific, where valuations look more reasonable and sector exposure is more balanced.

As of now, I’ve invested around $13,000 into JEPG, and a smaller position of $4,000 into JEPI. Both serve the same income strategy, but I see JEPG as a better fit for this market environment — especially if you want to diversify away from the U.S. while still enjoying high monthly payouts.

Of course, that’s what works for me. Depending on your goals and how much income you need, you might tilt differently. But for my portfolio, these ETFs offer a rare combination of income, flexibility, and downside stability — and that’s not easy to find in today’s market.

So, what do you think?

For me, they’re not meant to replace core holdings like REITs or traditional dividend stocks — but they do play a useful supporting role. Especially if you’re someone who values monthly payouts, lower volatility, and some cushion during uncertain times.

I’d love to hear how you’re navigating this yield surge.

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Until next time, happy investing — and stay steady!