JEPI Doesn't Fare Well In Rising Markets (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Earlier last year, I thought JEPI was a good ETF option compared to SCHD. This view mostly played out, but the relative alpha made here got neutralized in December 2023.
• Now, I have a more bearish outlook on JEPI as I do not like its underexposure to key names in the Information Technology sector, which I think will do well.
• JEPI has 13% of its portfolio allocated to a covered call strategy. Such a strategy does not fare well in rising markets.
• I believe we are in a rising market, as my technical analysis suggests that the SPY's breakout of all-time highs is a genuine one.
• Overall, I note that JEPI has the same valuation as SPY but with more unfavorable portfolio exposures. Hence, I anticipate it to underperform. I prefer VOO, and for yield-focused investors, I think private equity plays are a better option.

Read the full article here.