JEPQ Monthly Income Calculator
Estimate your monthly passive income from the JEPQ ETF in seconds.
Project your monthly cash flow based on JPMorgan's distribution logic. Adjust for yield changes and compare your annual income potential.
- Project monthly cash flow
- Adjust for yield changes
- Compare annual income
Based on JPMorgan distribution logic.
Enter your investment amount to see your potential payoutWhat Is the JEPQ ETF
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) is an actively managed ETF designed to generate income through a covered call strategy on the Nasdaq-100. It aims to provide investors with high monthly income rather than focusing solely on capital appreciation.
The "Premium" Income is generated by selling call options on the stocks held within the fund. The premiums collected from selling these options are distributed to shareholders as Monthly Distributions.
Why It Matters: It offers high yield potential (often 7-10%), but unlike standard growth ETFs, JEPQ uses Covered Calls which can cap upside potential during sharp market rallies.
Key Components of JEPQ Income
Investment Amount
This is the total principal capital you plan to allocate to JEPQ. The accuracy of your income projection relies on this figure representing your actual buy-in power.
Distribution Yield
The Annual Distribution Yield represents the percentage of your investment paid out to you over a year. It is crucial to distinguish between the SEC 30-Day Yield (a standardized snapshot) and the TTM (Trailing Twelve Months) Yield (historical actuals).
Yield Impact
Even a 1% change in yield significantly alters monthly income. For example, on a $100,000 investment, a 1% yield difference equals $1,000 per year in lost or gained income.
How the JEPQ Calculator Works
Monthly Income = (Principal × Yield) ÷ 12
Estimation vs. Reality:
- Estimation: This calculator smooths the annual yield into 12 equal monthly payments.
- Reality: JEPQ pays monthly, but the amount varies based on option premiums collected.
- Dividend Drag: Warning that high yield payouts can reduce the share price over time (Return of Capital components).
How to Use This Tool
- Check your investment amount or planned contribution.
- Find the current "Distribution Rate" or "SEC Yield" on JPMorgan's site or your brokerage.
- Input the percentage into the calculator.
- Review the monthly and annual breakdown.
Pro Tip
Re-run this calculation quarterly as yields shift with market volatility. Always verify the "SEC 30-Day Yield" for the most current projection.
Interpreting Your JEPQ Income
Understanding where your monthly income falls on the lifestyle spectrum helps in financial planning.
Income Tiers
Pocket Change
$0 - $100/mo
Covers a few dinners or one utility bill. Good for testing the strategy with a small principal.
Bill Payer
$100 - $500/mo
Covers car insurance, phone bills, or groceries. Provides meaningful monthly relief.
Supplemental Salary
$500 - $2,000/mo
Covers rent or mortgage in many areas. Acts as a significant part-time income replacement.
Financial Independence
$2,000+ /mo
Approaches full living expenses for many. Requires substantial principal ($250k+).
Action: Compare your result to your actual monthly expenses to see the "Coverage Ratio".
JEPQ vs. Other Income ETFs
| ETF | Underlying Index | Typical Yield | Strategy |
|---|---|---|---|
| JEPQ | Nasdaq-100 (Tech-heavy) | ~9-10% | Active Management |
| JEPI | S&P 500 (Diversified) | ~7-9% | Active Management |
| QYLD | Nasdaq-100 | ~11-12% | Passive Index |
Insight: JEPQ is the Nasdaq version of JEPI. Being actively managed, JEPQ potentially allows for better capital preservation and option strike selection compared to the passive QYLD.
Why Your Income May Vary
JEPQ's yield is not static; it is heavily influenced by market conditions.
- Market Volatility: JEPQ makes money selling options. When markets are volatile (scary), option premiums are high, meaning income goes up.
- Calm Markets: When markets are flat or boring, premiums drop, and income goes down.
- Return of Capital (ROC): Sometimes JEPQ pays you back your own principal. This isn't "profit" and can reduce the share price over time.
- Expense Ratio: JEPQ charges a fee (approx 0.35%), which is deducted from the fund's income before distribution.
Warning: Return of Capital
High distributions may include Return of Capital (ROC). While this increases immediate cash flow, it reduces the fund's Net Asset Value (NAV) and is not a gain on your investment.
Who Should Use JEPQ?
JEPQ serves specific portfolio needs for different types of investors.
- The "Income Floor": Retirees using JEPQ to pay fixed monthly costs in retirement.
- The "Cash Buffer": Investors holding JEPQ to rebalance portfolios without selling growth stocks at a loss.
- Tax Planning: JEPQ distributions are often taxed as ordinary income or qualified dividends (varies), unlike municipal bonds.
- Scenario: A 60-year-old shifting 20% of growth stocks to JEPQ for stability and cash.
Limitations of the JEPQ Strategy
While the yield is attractive, there are trade-offs to consider.
- Capped Upside: If the Nasdaq rallies 20%, JEPQ might only go up 5-10% because the call options limit gains.
- Principal Erosion: If the market drops, the share price drops; the dividend might not cover the loss.
- Not Risk-Free: This is an equity ETF, not a savings account. You can lose money.
Risk Warning
Past high yields do not guarantee future results. The covered call strategy limits participation in significant market rallies.
Frequently Asked Questions
Data Sources & References
- JPMorgan Asset Management - Official JEPQ Fund Page (Factsheet/Prospectus).
- SEC EDGAR Database - Filings and financial reports.
- NASDAQ Data - Real-time yield and pricing data.