Markets absorbed the most recent messaging from Federal Reserve Chair Jerome Powell that the central bank remains committed to bringing down inflation, with major indexes oscillating between losses and gains before closing higher. Investing in continued volatility has been a challenge for advisors and investors this year, and Todd Rosenbluth, head of research at VettaFi, appeared on the “Claman Countdown” with Liz Claman on Fox Business to discuss income opportunities in uncertain times.
Rosenbluth explained that the JPMorgan Equity Premium Income ETF (JEPI) is a fund that can offer income opportunities while also providing a more defensive approach to investing within equities.
“This is an ETF that provides stock exposure through defensive equities, lower-risk equities, but then uses options — covered calls — to be able to augment that income,” Rosenbluth said.
The fund has offered around a 9% yield since it came to market in May 2020 and has provided consistent income for investors since inception. JEPI is an actively managed fund with $12.6 billion in assets under management as of 09/07/22.
“You get the benefits of the stock picking; you get the benefit of the ability to take those options and actively roll those forward on a weekly basis in a staggered way,” explained Rosenbluth.
JEPI is one of the market’s largest actively managed equity ETFs and carries an expense ratio of just 0.35%. It’s a good option for advisors and investors seeking income for portfolios in a year where equities and bonds have both been challenged.
Dividend-focused ETFs have also been a popular option for investors seeking income, with funds such as the ALPS Sector Dividend Dogs ETF (SDOG) experiencing strong inflows in 2022.
“You’re going to get diversification, but you’re not getting the security selection, you’re just getting the highest yielding companies across all the various sectors,” said Rosenbluth.
SDOG has a dividend yield of 4.11% and a 30-day SEC yield of 3.95% as of 09/07/22, with an expense ratio of 0.40%.
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