SPYI vs. JEPI: Why NEOS ETF Outperforms Traditional Equity Index Funds in Risk-Adjusted Returns

When it comes to evaluating portfolio efficiency, investors must look beyond raw returns and scrutinize risk-adjusted metrics. The NEOS S&P 500 High Income ETF (SPYI) and the JPMorgan Equity Premium Income ETF (JEPI) offer a compelling case study in this regard. While both funds employ active strategies to generate income, SPYI's superior Sharpe and Sortino ratios, combined with its unique risk profile, make it a standout choice for investors prioritizing returns per unit of risk.

Risk-Adjusted Returns: SPYI's Clear Edge

According to a report by , over the 2020–2025 period[SPYI vs. JEPI — ETF Comparison Tool]^[1]. This metric, which measures excess returns relative to volatility, underscores SPYI's ability to deliver stronger compensation for risk taken. Similarly, , highlighting its superior handling of downside volatility—a critical factor for risk-averse investors[SPYI vs. JEPI — ETF Comparison Tool]^[1].

These figures are not mere numbers; they reflect SPYI's strategy of systematically writing covered calls on the S&P 500 index, which generates income while maintaining exposure to equity upside[NEOS S&P 500 High Income ETF (SPYI)]^[3]. JEPI, by contrast, relies on a blend of stock selection and covered calls but appears less effective at balancing risk and reward.

Volatility and Drawdowns: A Trade-Off Worth Considering

SPYI's higher volatility— —comes with a cost[SPYI vs. JEPI — ETF Comparison Tool]^[1]. [SPYI vs. JEPI — ETF Comparison Tool]^[1]. However, these risks are contextualized by SPYI's higher returns. For investors with a medium to long-term horizon, the additional volatility is justified by the fund's ability to consistently outperform JEPI in risk-adjusted terms.

Expense Ratios: Paying for Performance

is undeniably attractive[JEGP.L vs. JEPI — ETF Comparison Tool | PortfoliosLab]^[2], fee[NEOS S&P 500 High Income ETF (SPYI)]^[3] reflects the complexity of its strategy. While the cost differential is notable, SPYI's superior Sharpe ratio suggests that the premium is warranted for investors seeking enhanced risk-adjusted returns.

The Bottom Line: Efficiency Over Simplicity

In a market where traditional equity index funds often prioritize low costs over nuanced risk management, SPYI's approach is a breath of fresh air. Its ability to generate income through options while maintaining equity exposure creates a hybrid profile that bridges the gap between passive and active strategies. For investors who prioritize portfolio efficiency, SPYI's metrics tell a clear story: it's not just about surviving the storm, but thriving in it.