Analysis: JEPI vs JEPQ. I simulated a $500k portfolio to quantify the impact of Ordinary Income and NAV Erosion over 20 years.

Original Reddit comment

Author discusses owning JEPI as a bond surrogate amid rising rates and avoiding JEPQ due to underlying valuation and factor exposure.

JEPI — LONG The author holds JEPI as a surrogate or replacement for a bond allocation in a taxable brokerage. The rationale is that JEPI can serve this role against a backdrop of secularly rising interest rates.

I own a JEPI allocation in my taxable brokerage because I view it is a surrogate / replacement for a bond allocation against the backdrop of secularly rising interest rates.

JEPQ — AVOID The author is not interested in JEPQ due to the valuation and factor exposure of its underlying holdings. For technology exposure, the author prefers owning the tails of the return distribution rather than the middle that JEPQ represents.

I'm not interested in JEPQ at all given valuation and factor exposure of the underlying.