JEPI vs GPIX: Which covered call ETF actually wins on returns?

JPMorgan’s Equity Premium ETF JEPI has done well in the past few years, with its assets soaring to $45 billion. Its inflows have jumped by over $4.1 billion as investors rushed to buy it for its 8% yield. 

Still, another little-known fund by Goldman Sachs is making waves. Goldman Sachs S&P 500 Premium Income ETF (GPIX) has gone from nowhere to $4.1 billion in assets, with the year-to-date inflows hitting $2 billion. So, which covered call ETF should one buy?

What is the JEPI ETF?

JEPI, while not the first covered call ETF, has become the biggest in the industry. It has become a popular fund among investors seeking monthly payouts that are higher than those offered by passive funds like SCHD and VYM. 

The fund uses a fairly simple approach. It uses the covered call strategy, where it invests in about 115 companies in the S&P 500 Index through equity-linked notes (ELNs). It then writes call options on the S&P 500 Index.

This investment generates returns by making money as the stocks it invests in rise and make their dividend payments. At the same time, the fund receives a monthly premium from its call options. JEPI has an expense ratio of 0.35%, which is quite affordable for an active fund. 

What is the GPIX ETF?

Goldman Sachs created the GPIX ETF after observing JEPI’s success. While the two funds have a similar approach, they have some differences in how they are calculated. 

For example, GPIX focuses on the whole S&P 500 Index and has stakes in all its companies. Instead of uses ELNs, the fund focuses on S&P 500 call options. It also has an expense ratio of 0.29%, making it more affordable than JEPI.

Also, the fund has a higher dividend yield than JEPI. It has a yield of 8.12%, while JEPI pays a 8.05% return.

GPIX is doing better than JEPI

Historical data shows that GPIX ETF is doing better than JEPI, possibly because it maintains a higher equity beta. In bull markets, it is designed to capture more returns than the more conservative JEPI.

Data shows that GPIX has had a better performance than JEPI ETF. Its total return this year has risen to 8.9% this year, while JEPI has jumped by just 2.68%. 

JEPI vs GPIX ETF | Source: TradingView

The same has happened in the last 12 months, with GPIX soaring by 18% and JEPI jumping by 6.80%. Since its launch in 2023, GPIX has jumped by 75%, while JEPI has jumped by 28%.

These numbers mean that GPIX is a better performer than JEPI by far. It also has a higher dividend yield and a smaller expense ratio than JEPI. 

To be clear, past performance is never an indicator of what will happen in the future. But it can give a better indication of what will happen in the future, making GPIX a better buy than JEPI for now.