With interest rates poised to rise, income-minded investor must still find ways to maintain their current income streams with the threat of capital depreciation that comes with higher rates. Yet alternative options in the income world are not exactly plentiful, and equity overweights can be outright dangerous.
In the upcoming webcast, Income is the Outcome: Why Active Income Strategies Work, Hamilton Reiner, Managing Director, Portfolio Manager, J.P. Morgan Asset Management; and Jordan Jackson, Vice President, Global Market Strategist, J.P. Morgan Asset Management, will discuss how a total return strategy that generates income using option premiums can give investors the best of both worlds.
Specifically, the recently launched JPMorgan Equity Premium Income ETF (JEPI) shows an 7.96% 30-day SEC yield.
JEPI “generates income through a combination of selling options and investing in U.S. large cap stocks, seeking to deliver a monthly income stream from associated option premiums and stock dividends,” according to J.P. Morgan Asset Management.
The JPMorgan Equity Premium Income ETF targets a significant portion of S&P 500 returns with less volatility, seeking annualized income distributed monthly. The fund leverages an experienced equity management team comprising more than 50 years of combined experience and headed by 32-year industry veteran Hamilton Reiner as the lead portfolio manager.
JEPI tries to generate income through a combination of selling options and investing in U.S. large cap stocks, providing investors with a monthly income stream from associated option premiums and stock dividends. The fund managers try to construct a diversified, low volatility equity portfolio through a proprietary research process designed to identify over- and under-valued stocks with attractive risk-to-return characteristics.
The actively managed ETF is an adaptation of the JPMorgan Equity Premium Income Fund (JEPIX), which has been running since August 2018.
Furthermore, this yield-generating strategy may help fixed income investors diversify their total return portfolio with lower equity risk.
Financial advisors who are interested in learning more about income strategies can register for the Wednesday, July 21 webcast here.