The JPMorgan Equity Premium Income ETF (JEPI) and JPMorgan Ultra-Short Income ETF (JPST) are two of the largest actively managed exchange-traded funds in the world. Managed by Jon Maier, these funds aim to provide investors with downside protection while generating income.
Maier, the chief ETF strategist at J.P. Morgan Asset Management, explained that JEPI offers investors increased income when volatility, as measured by the VIX, rises. Conversely, when volatility decreases, the options written out of the money provide upside potential in the underlying portfolio. During the market volatility in April, JEPI experienced a 3% decline, outperforming the broader market as the S&P 500 fell almost 5% year-to-date.
The top holdings of JEPI include companies such as Mastercard, Visa, and Progressive, as listed on JPMorgan’s website. On the other hand, the JPMorgan Ultra-Short Income Fund focuses on fixed income investments rather than U.S. equities, providing stability for investors looking to protect their principal.
ETF Action’s Mike Akins highlighted the importance of these ETFs in meeting investors’ needs during turbulent market conditions. According to J.P. Morgan Asset Management, the JPMorgan Ultra-Short Income Fund had the second-highest trading volume among active U.S. fixed income ETFs during a particularly volatile week in April.
Overall, these actively managed ETFs offer a way for investors to stay defensive without exiting the market completely. By providing downside protection and income generation, they serve as a valuable tool for investors looking to weather market storms while maintaining a diversified portfolio.
