Big Tech Dividends: GPIQ ETF Outperforms JEPI and Neos Products

Covered call ETFs like JPMorgan Equity Premium Income ETF (JEPI), Global X Nasdaq 100 Covered Call ETF (QYLD), and Neos products have gained popularity. However, investors are encouraged to consider GPIQ, which offers big monthly dividends from big tech companies. The article recommends replacing JEPQ with GPIQ, highlighting its potential benefits.

Covered call ETFs have gained significant popularity in recent years, offering high monthly distributions and exposure to leading tech stocks. The JPMorgan Equity Premium Income ETF (JEPI), Global X Nasdaq 100 Covered Call ETF (QYLD), and Neos products have become particularly popular among income investors. However, a new contender, the Global X NASDAQ-100 Covered Call ETF (GPIQ), is gaining traction and may offer a better alternative.

The appeal of covered call ETFs lies in their ability to generate substantial income through high monthly distributions. These funds typically involve selling call options on the underlying stocks, which can provide a steady stream of income. However, these funds are not without risks. The primary downside is that they cap the upside during market rallies, which can lead to underperformance during strong bull markets. Additionally, during market crashes, these funds still participate fully in the downturn.

The Global X NASDAQ-100 Covered Call ETF (GPIQ) offers a compelling alternative to funds like JEPQ. GPIQ provides exposure to the top 100 non-financial companies listed on the NASDAQ, including major tech giants like Microsoft (MSFT), Amazon (AMZN), and NVIDIA (NVDA). This fund also offers a high monthly dividend yield, which can be attractive to income investors.

One of the key benefits of GPIQ is its focus on the NASDAQ-100 index, which includes a diverse range of technology, consumer goods, and healthcare companies. This diversification can help mitigate some of the risks associated with covered call ETFs. Additionally, the fund's expense ratio is relatively low, making it a cost-effective option for investors.

While GPIQ offers many advantages, it is essential to consider the risks associated with covered call ETFs. These funds can suffer from NAV erosion during sharp market recoveries, as was the case with QYLD. Therefore, it is crucial to include these funds as part of a well-diversified portfolio.

In conclusion, while covered call ETFs like JEPQ have been popular among income investors, the Global X NASDAQ-100 Covered Call ETF (GPIQ) offers a compelling alternative. GPIQ provides exposure to big tech companies, a high monthly dividend yield, and diversification benefits. However, investors should be aware of the risks associated with these funds and consider them as part of a well-diversified portfolio.

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[1] da-kuk/E+ via Getty Images. Covered call ETFs like the JPMorgan Equity Premium Income ETF (JEPI), the Global X Nasdaq 100 Covered Call ETF (QYLD), and several Neos products (SPYI)(QQQI) have become very popular in recent years, as demonstrated by their strong assets under management growth. Data by YCharts The appeal of these funds is quite straightforward, as they combine high monthly distributions—amounting to 10%+ annualized dividend yields in most cases—with exposure to leading mega-cap tech stocks like Microsoft (MSFT), Amazon (AMZN), and NVIDIA (NVDA). This gives income investors better diversification in their overall portfolios than they otherwise would get by simply investing in ETFs like the Schwab U.S. Dividend Equity ETF (SCHD), while also boosting their yields. However, as I have written about in a recent article, these funds are not necessarily great long-term wealth compounders, nor are they dependable dividend payers over time, because upside is capped during market rallies due to the nature of covered calls. Meanwhile, their downside risk remains unchecked, as they still participate fully in market crashes. Therefore, during periods where there are sharp V-shaped recoveries from market crashes, these funds can get left hopelessly behind and may eventually suffer meaningful NAV erosion, as has been the case with QYLD, which is the oldest of these funds. Data by YCharts With that being said, there still is potentially a place for these funds as part of a well-diversified portfolio. [https://seekingalpha.com/article/4811782-big-monthly-dividends-from-big-tech-forget-jepq-buy-gpiq-instead](https://seekingalpha.com/article/4811782-big-monthly-dividends-from-big-tech-forget-jepq-buy-gpiq-instead)