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Buying and holding high-quality companies or exchange-traded funds (ETFs) is an excellent way to build wealth over a long-term time horizon. But some investors prioritize passive income over long-term capital appreciation to supplement retirement income, cover a portion of their expenses, or align with other financial objectives. Bonds, Treasury Bills (T-Bills), money market funds, and high-yield savings accounts remain go-to solutions for investors seeking passive income outside equities.
But the ETF industry has grown rapidly in size and sophistication. **_Missed Nvidia in 2009? This Rare Signal Is Flashing Again._**_In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia._**_Continue »_** Now, investors can buy covered call ETFs, which cap upside potential in exchange for income.
The**JPMorgan Equity Premium Income ETF** (NYSEMKT: JEPI) and the **JPMorgan Nasdaq Equity Premium Income ETF** (NASDAQ: JEPQ) have emerged as two of the largest covered call ETFs by net assets, with the former focusing on **S&P 500** (SNPINDEX: ^GSPC) components and the latter geared toward components of the **Nasdaq-100**. As of Aug. 31, 2026, the JPMorgan Equity Premium Income ETF, which we will refer to simply as JEPI going forward, has a 30-day SEC yield of 7.4%, while JEPQ sports a 30-day SEC yield of 13.3%. Those yields are far higher than what investors can get from T-Bills or bonds -- even with 10-year Treasury yields surpassing 5% for the first time since 2023.
While the S&P 500 yields just 1.1%, there are ETFs that invest in high-yield dividend stocks that yield far more than the index. Dividend Equity ETF** (NYSEMKT: SCHD), which we'll refer to as SCHD going forward, is one of the most popular high-yield stock ETFs with $111.9 billion in net assets. Its 30-day SEC yield is just 3.2%, which is solid in its own right but far lower than JEPI and JEPQ.
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