There is a lot to like about the JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI).
For a strategy that combines active stock selection with derivatives, it is priced reasonably at a 0.35% expense ratio. The fund’s portfolio manager, Hamilton Reiner, has largely delivered on the strategy’s core promise: lower volatility than the broad market while generating above-average income.
JEPI does this by holding a portfolio of defensive large cap equities and layering in options exposure through equity linked notes, or ELNs. The options income helps support the fund’s monthly distributions and dampens volatility during turbulent markets.
If there is one drawback, it is tax efficiency. Because the income comes largely from ELNs, most of the distributions are classified as ordinary income rather than qualified dividends, return of capital, or capital gains.
Even so, the strategy has held up well during the market turbulence seen so far in 2026. Volatility tied to tariffs, geopolitical tensions with Iran, and broader trade uncertainty has created a challenging environment for equities. From January 2, 2026 through March 4, 2026 according to testfolio.io, JEPI has delivered a cumulative return of 4.29% before taxes.
That is a respectable showing for an income oriented strategy, especially given that the S&P 500 index is flat year-to-date. However, two competing options income ETFs have quietly outperformed JEPI so far over the same period.
Both are actively managed and both use options strategies, but they approach income generation in very different ways. Instead of relying heavily on equity linked notes, they structure their options exposure directly within the portfolio on individual stocks, which can create different return patterns and distribution profiles.
Despite JEPI’s headline 30 day SEC yield of 7.56% and its sizable $4.5 billion in assets under management, there are valid reasons for income investors to look beyond this popular ETF in 2026.
JEPI Competitor No. 1: Blue Chip Dividend Stocks With Options
The first ETF that has outperformed JEPI year to date is the Amplify CWP Enhanced Dividend Income ETF (NYSEMKT:DIVO). Year to date through March 4, 2026, DIVO has delivered a cumulative total return of 5.22%.
Like JEPI, DIVO begins with active stock selection, but the screening criteria are quite different. The strategy focuses on high quality large cap companies with strong fundamentals, particularly those with consistent dividend growth and earnings growth.
From there, the managers allocate across sectors with the goal of maintaining a distribution broadly similar to the S&P 500, while allowing for tactical overweights based on the macro environment. The end result is a concentrated portfolio of roughly 20 to 25 stocks. Companies are selected using screens that emphasize management track record, earnings quality, cash flow strength, and return on equity.
The biggest difference between DIVO and JEPI appears in how the options income is generated. While JEPI relies heavily on ELNs to generate option premiums, DIVO instead sells covered calls directly on individual stocks within the portfolio. This gives the manager far more flexibility.
For example, when a company is approaching an earnings announcement, implied volatility often rises. That increases the price of options premiums. DIVO’s managers can selectively sell calls on those positions to harvest that richer premium without capping the upside of the entire portfolio.
Of course, this approach introduces manager specific risk. The success of the strategy depends heavily on the manager’s judgment about when and where to write calls. So far, however, the track record suggests the team has executed well.
Since inception, DIVO has delivered an annualized return of 14.68% with distributions reinvested before taxes. By comparison, the CBOE S&P 500 BuyWrite Index, which mechanically sells at the money one month calls on 100% of its portfolio, has produced a much lower annualized return of 7.33%.
Investors should also look past the headline yield. DIVO’s distribution rate, calculated as the most recent monthly payout annualized and divided by net asset value, currently sits at 4.79%. That is noticeably lower than JEPI’s yield. However, total return matters more than headline income. On that front, DIVO has delivered strong long term results.
The main drawback is cost. DIVO carries a 0.56% expense ratio. That is higher than JEPI’s 0.35%, though still within a reasonable range compared with many options based ETFs.
JEPI Competitor No. 2: International Stocks With Options
Another scenario where a strategy like JEPI could face headwinds is if U.S. equities begin to lag international markets. Many income strategies built around covered calls are concentrated in U.S. large cap stocks, so a period of stronger international performance can limit their opportunity set.
So far, JPMorgan has not launched an international version of JEPI. Amplify, however, offers a direct counterpart to DIVO in the form of the Amplify CWP International Enhanced Dividend Income ETF (NYSEMKT:IDVO), which has returned 6.92% year-to-date through March 4th, 2026.
IDVO uses a strategy that closely resembles DIVO, but with a different investment universe. Instead of U.S. blue chip stocks, the fund draws from companies in the MSCI ACWI ex U.S. Index. The managers apply similar screens that emphasize earnings growth, cash flow strength, dividend growth, and management track record. Sector exposures are designed to roughly mirror the broader international market, while allowing for tactical underweights and overweights based on macro conditions.
The final portfolio is slightly more diversified than DIVO. While still screened for earnings, cash flow, return on equity, and management quality, the fund typically holds between 30 and 50 securities. Many of these positions are American depositary receipts, or ADRs, which trade in the United States and have listed options chains.
Like DIVO, the fund sells covered calls directly on individual stocks rather than using index level options or structured notes. This approach tends to produce a lower headline yield but allows the manager to retain more upside while selectively harvesting option premiums when volatility is elevated.
IDVO expects to generate roughly 3% to 4% of its income from dividends. That is consistent with international markets, which typically offer higher dividend yields than U.S. stocks. Covered call premiums are expected to contribute an additional 2% to 4%, bringing the current distribution yield to 6.08%.
Performance has been strong. Since inception, IDVO has delivered a 23.99% annualized total return before taxes based on net asset value. Over the same period, the MSCI ACWI ex U.S. Index produced a lower annualized return of 20.44%. That result is notable because most covered call strategies struggle to keep pace with long only equity benchmarks over time.
Morningstar currently assigns IDVO a five star rating, placing it near the top of the derivative income category based on risk adjusted returns among its peer group of 83 funds. Higher fees, however, are part of the tradeoff. IDVO carries an expense ratio of 0.65%, making it even more expensive than DIVO.