With interest rates set to rise, income-conscious investors still need to find ways to maintain their current income streams with the threat of capital depreciation that comes with higher rates. Yet alternative options in the income world are not really plentiful, and overweightings in equities can be downright dangerous.
In the next webcast, Income is the Outcome: Why Active Income Strategies Work, Hamilton Reiner, Managing Director, Portfolio Manager, JP Morgan Asset Management; and Jordan Jackson, Vice President, Global Market Strategist, JP Morgan Asset Management, will discuss how a total return strategy that generates income using option premiums can give investors the best of both worlds.
Specifically, the recently launched JPMorgan Equity Premium Income ETF (JEPI) shows a 30-day SEC yield of 7.96%.
JEPI “generates income through a combination of writing options and investing in large-cap US stocks, seeking to generate a monthly income stream from associated option premiums and stock dividends,” according to JP Morgan Asset Management.
The JPMorgan Equity Premium Income ETF targets a significant portion of the S&P 500 returns with less volatility, seeking annualized income distributed monthly. The fund is backed by an experienced equity management team comprising over 50 years of combined experience and led by 32-year industry veteran Hamilton Reiner as lead portfolio manager.
JEPI tries to generate income by combining writing options and investing in large cap US stocks, providing investors with monthly income from associated option premiums and stock dividends. Fund managers attempt to build a diversified, low volatility equity portfolio through a proprietary research process designed to identify overvalued and undervalued stocks with attractive risk / reward characteristics.
The actively managed ETF is an adaptation of the JPMorgan Equity Premium Income Fund (JEPIX), which has been in existence since August 2018.
Additionally, this return-generating strategy can help fixed income investors diversify their total return portfolio with lower equity risk.
Financial advisors who want to learn more about income strategies can sign up for the Wednesday, July 21 webcast here.