GPIX Outperforms JEPI as the Best S&P 500 Income ETF for Retirement in 2025

For retirees seeking stable income in an era of historically low bond yields and tepid dividend returns from traditional equities, covered call ETFs have emerged as a compelling solution. Among the leading contenders-Goldman Sachs' S&P 500 Core Premium Income ETF (GPIX) and JPMorgan's Equity Premium Income ETF (JEPI)-GPIX has distinguished itself in 2025 as the superior choice for retirement portfolios. This analysis examines why GPIX's strategic flexibility, tax efficiency, and risk-adjusted returns make it the optimal S&P 500 income ETF for income-focused investors.

Performance and Risk-Adjusted Returns

GPIX has outperformed JEPI in 2025, delivering a year-to-date return of 8.97% compared to JEPI's 3.61%. This gap is amplified by GPIX's higher Sharpe Ratio of 0.94 versus JEPI's 0.53, indicating superior risk-adjusted returns. While JEPI's defensive structure limits downside volatility, GPIX's dynamic approach allows it to capitalize on market rebounds, a critical advantage in a late-cycle economy where equity gains often outweigh steady but modest income streams.

Cost Efficiency and Tax Advantages

Expense ratios, though modest, compound over time. GPIX charges 0.29%, while JEPI's 0.35% fee represents a 20% cost disadvantage. For retirees holding these ETFs in taxable accounts, GPIX's tax efficiency further enhances its appeal. Its dynamic overwrite strategy minimizes net asset value (NAV) erosion risk, preserving capital and reducing taxable distributions. In contrast, JEPI's static covered call approach, while providing downside protection, may erode NAV more aggressively during prolonged market rallies.

Strategic Flexibility in Volatile Markets

GPIX's active management model adjusts the percentage of its portfolio covered by call options based on market conditions. This adaptability allows it to preserve upside potential during bull markets while boosting income during flat or declining periods. JEPI, by contrast, employs a fixed 100% overwrite strategy, capping gains if the S&P 500 rises above the strike price. In 2025, this rigidity has left JEPI trailing broader market benchmarks like VTI, particularly during rebounds.

Dividend Consistency and Retirement Needs

While JEPI offers a slightly higher yield (8.49% trailing twelve months vs. GPIX's 8.13%) and monthly distributions, GPIX's total return profile is more aligned with long-term retirement goals. Retirees prioritizing capital preservation may favor JEPI's defensive structure, but those seeking a balance of income and growth will find GPIX's ability to participate in equity gains more valuable. Additionally, GPIX's consistent 8%+ yield, combined with its tax efficiency, provides a more sustainable income stream over time.

Risk Management and Volatility Considerations

Critics may note GPIX's higher volatility and a maximum drawdown of -17.50% compared to JEPI's -13.71% according to performance data. However, this risk is offset by GPIX's superior performance during market recoveries, which are critical for retirees needing to replenish portfolios after downturns. JEPI's smaller drawdowns come at the cost of limited upside participation-a trade-off that may not justify its lower returns in a market environment favoring growth according to market analysis.

Conclusion

For retirees navigating a low-yield landscape, GPIX's strategic agility, tax efficiency, and superior risk-adjusted returns make it the clear choice over JEPI in 2025. While JEPI's defensive approach offers comfort in volatile markets, GPIX's ability to adapt to changing conditions and capture equity gains aligns more closely with the dual objectives of income generation and capital appreciation. As the S&P 500 remains a cornerstone of retirement portfolios, GPIX's dynamic covered call strategy provides a more robust foundation for long-term financial security.