JEPI is an actively managed fund from JPMorgan that generates income in two ways: dividends from a lower-volatility portfolio of US large-cap stocks, and option premiums from equity-linked notes that sell call options on the S&P 500. Selling call options gives up part of the gains in strong markets in exchange for income, so the fund tends to lag when the market rises quickly. In flat or modestly falling markets the option premium can add to returns. The monthly distribution is higher than that of most equity funds, but part of it comes from option premiums rather than company dividends, and it can change from month to month. JEPI is used mainly by investors who prioritize current income over long-term capital growth.
