1 High-Yield Dividend ETF to Buy to Generate Passive Income

Core Viewpoint - The JPMorgan Equity Premium Income ETF (JEPI) is positioned as a strong investment option for generating high yield through a conservative approach, focusing on lower-volatility, dividend-paying stocks while utilizing a covered call strategy to enhance income generation [2][4][5]. Group 1: ETF Overview - The JPMorgan Equity Premium Income ETF primarily invests in lower-volatility, dividend-paying stocks, but its main income source is from a covered call strategy applied to the portfolio [4]. - By writing out-of-the-money call options on the S&P 500 index, the fund generates a sustainable distribution income stream, currently yielding 8%, which is higher than traditional stock investments [5]. Group 2: Investment Strategy - The fund targets higher-quality, more durable stocks within the S&P 500, which reduces overall portfolio volatility and helps produce a steadier income stream [6]. - JEPI offers a monthly distribution schedule, allowing income to reach shareholders faster compared to the typical quarterly payouts of most stocks and ETFs, enabling quicker reinvestment of capital [7]. Group 3: Market Context - The recent market has been dominated by a tech rally, leaving low-volatility stocks underappreciated; however, as this rally slows, conservative dividend equities may gain traction [8]. - High-yield covered call strategies are seen as an effective way to generate income in the current market environment without excessive risk exposure [9].