ETF Comparison: JPMorgan Equity Premium Income ETF (JEPI) Versus NEOS S&P 500 High Income ETF (SPYI)

JEPI vs SPYI: Total cost of ownership

When it comes to fees, JEPI

is about as cheap as it gets for an actively managed strategy that combines stock selection with a covered call overlay.

It charges just a 0.35% expense ratio, or $35 annually on a $10,000 investment. In contrast, SPYI comes in at 0.68%, which is more typical for active covered call ETFs, costing you $68 per $10,000 invested.

Looking beyond the headline fee, JEPI also carries lower implicit trading costs. Its 30-day median bid-ask spread is just 0.019%, compared to 0.025% for SPYI.

Verdict: Add up both the explicit and implicit costs, and JEPI is meaningfully cheaper to buy, hold, and trade.

JEPI vs SPYI: Methodology and holdings

Both JEPI and SPYI are covered call ETFs, but they take very different approaches when it comes to constructing their portfolios and implementing the options overlay.

JEPI

holds a portfolio of large- and mid-cap U.S. stocks selected for low volatility. To sell S&P 500 index calls without having to own all 500 underlying names, JEPI allocates up to 15% of the portfolio to equity-linked notes (ELNs).

These ELNs replicate the payoff of one-month-out, slightly out-of-the-money SPX index calls, staggered weekly to smooth income. The result is a high 12-month trailing yield of 9.05%, but most of it is taxed as ordinary income.

SPYI

, on the other hand, holds all the constituents of the S&P 500 directly. Its options overlay uses Section 1256 contracts, which benefit from 60/40 capital gains tax treatment—60% taxed at the long-term rate, 40% at the short-term rate.

SPYI also actively tax-loss harvests its holdings, which allows the fund to classify more of its monthly distributions as return of capital. That makes the current 12.49% trailing 12-month yield far more tax efficient, with 96% of the latest monthly payout classified as return of capital.

Because of their different equity strategies, sector exposures differ as well. SPYI mirrors the S&P 500 with a typical tilt toward tech, consumer discretionary, and financials. JEPI puts more emphasis on healthcare, consumer staples, and industrials. JEPI is also far less top-heavy—it doesn’t have the same concentration in Magnificent Seven names as SPYI.

Verdict: JEPI’s combination of low-volatility stock selection and SPX call overlay via ELNs offers a smoother ride and solid income, but sacrifices tax efficiency. SPYI is more vanilla in its holdings, but it’s optimized for tax savings. In a registered account like a Roth IRA, I’d lean toward JEPI. In a taxable brokerage account, SPYI likely makes more sense.

JEPI vs SPYI: Risk and return

SPYI

is newer than JEPI

JEPI

-1.14%

, so there’s less historical data to work with, but what we do have paints a clear picture. Over the past year, SPYI has outperformed on a total return basis, while JEPI has pulled in more inflows overall. That said, relative to their size, SPYI’s asset growth has been faster.

In terms of risk, JEPI has behaved exactly as you’d expect. Over the last year, it’s been less volatile and has experienced a shallower maximum drawdown than SPYI. That lines up with its strategy of focusing on lower-volatility stocks and smoothing income with an options overlay.

Looking at a longer-term backtest from August 30, 2022, to June 2, 2025, SPYI still comes out ahead. It delivered a compound annual growth rate (CAGR) of 12.93% versus 9.3% for JEPI. Despite SPYI’s higher volatility, it also posted a stronger risk-adjusted return with a Sharpe ratio of 0.61 compared to JEPI’s 0.42. So, while JEPI had lower drawdowns and smaller fluctuations, the returns were lower in kind.

Verdict: SPYI justifies its place in a portfolio, especially if tax efficiency is a priority. You get stronger total and risk-adjusted returns, even if you give up a bit of short-term stability.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.