QDVO vs. JEPQ: Strategic Asset Rotation for Nasdaq Upside in 2025

In the dynamic landscape of Nasdaq-linked ETFs, investors seeking to balance growth and income face a critical choice between Amplify CWP Growth & Income ETF (QDVO) and JP Morgan NASDAQ Equity Premium Income ETF (JEPQ). As of December 2025, QDVO has outperformed JEPQ in total returns, with a year-to-date gain of 20.62% versus JEPQ's 15.44%. However, JEPQ's lower expense ratio (0.35% vs. QDVO's 0.55%) and higher dividend yield (11.10% vs. 7.82%) position it as a compelling alternative for income-focused strategies according to analysis. This analysis explores how strategic rotation between these two ETFs can optimize Nasdaq exposure, leveraging their distinct risk-return profiles.

Performance and Strategy: Growth vs. Income

QDVO's strength lies in its technically covered call strategy, where 30% to 50% of its portfolio writes out-of-the-money call options with one-month durations. This approach generates monthly income while preserving upside potential during Nasdaq rallies. In contrast, JEPQ employs a hybrid model combining active equity selection with synthetic equity link notes (ELNs), which caps gains in strong bull markets but stabilizes returns during volatility.

From August 2024 to December 2025, QDVO delivered a 34.85% total return, translating to a 26.15% annualized return, compared to JEPQ's 27.46% total return and 20.75% annualized return. However, JEPQ's historical resilience-having weathered both bear and bull markets since its 2022 launch-suggests it may offer greater stability during downturns. For instance, in 2023, JEPQ returned 36.28%, while QDVO's 2022 performance was likely negative amid the Nasdaq bear market.

Volatility and Risk: Correlation and Drawdowns

Both ETFs exhibit high volatility, with QDVO's daily standard deviation at 20.59% versus JEPQ's 19.09%. Their 0.90 correlation means they tend to move in tandem, limiting diversification benefits. However, QDVO's maximum drawdown of -17.75% in April 2025 was marginally better than JEPQ's -20.07%. This suggests QDVO's covered call strategy may mitigate downside risk slightly more effectively during sharp Nasdaq corrections.

Strategic Rotation: Market Conditions and Investor Goals

Strategic rotation between QDVO and JEPQ hinges on market outlook and investor priorities. In a bull market, QDVO's growth-oriented approach-exposing 70% to 50% of its portfolio to Nasdaq upside-could outperform JEPQ's capped structure. For example, QDVO's 2024 return of 11.79% lagged JEPQ's 24.89%, but this may reverse in a sustained rally. Conversely, during high volatility or bear markets, JEPQ's income focus and active hedging via ELNs may provide steadier returns. Institutional interest in JEPQ, such as Sheets Smith Investment Management's $4.56 million stake in October 2025, underscores its appeal as a defensive play.

For investors prioritizing income, JEPQ's 11.10% trailing yield is a key draw, though its synthetic structure may limit long-term capital appreciation. QDVO, with its net asset value growth of 27% to 28% annually, offers stronger potential for compounding but at the cost of higher expense ratios and AUM risk (QDVO's AUM is $375 million vs. JEPQ's $31 billion according to analysis).

Conclusion: Balancing Growth and Stability

The QDVO-JEPQ debate reflects a broader tension between growth and income in Nasdaq-linked strategies. QDVO excels in capturing upside during bull markets but carries higher costs and volatility. JEPQ, while less aggressive, provides consistent income and stability, particularly in volatile environments. Strategic rotation-favoring QDVO in rising markets and JEPQ in uncertain ones-could optimize returns while managing risk. Investors should align their choices with their risk tolerance, time horizon, and market outlook, recognizing that neither ETF is universally superior but both offer unique advantages in a diversified portfolio.