JEPI vs SCHD: Side-by-Side ETF Comparison

Which one is better? JEPI focuses on generating steady income through option premiums and lower volatility, while SCHD targets high-yielding U.S. dividend stocks with a value tilt and long-term track record.
Choose JEPI for smoother monthly income and downside protection, or SCHD for higher yield, lower fees, and pure dividend growth exposure.

Table of Content

ETF Issuers & Investment Objective

• JEPI: Managed by JPMorgan Asset Management since its May 2020 launch, JEPI seeks to deliver equity market exposure with enhanced income by combining an actively managed portfolio of S&P 500 stocks and equity-linked notes with a covered-call overlay that sells S&P 500 call options to generate option premiums.
• SCHD: Managed by Charles Schwab Investment Management since its October 2011 inception, SCHD aims to track the Dow Jones U.S. Dividend 100 Index, investing at least 90 % of its assets in high-dividend-yielding U.S. companies selected for dividend consistency and fundamental strength, thereby offering a low-cost, passive approach to income-focused large-cap equities.

Annual & Cumulative Returns

The divergence in returns largely stems from each fund’s inception and strategy. JEPI, launched in May 2020, shows a 0 % 10-year track record simply because it hasn’t existed that long, whereas SCHD tracing back to October 2011 has compounded nearly 11 % annually over a decade. Year-to-date, JEPI’s modest +1.33 % reflects its covered-call overlay cushioning market swings, while SCHD’s –1.99 % result underscores its pure equity exposure sensitive to early-2025 headwinds. Over shorter intervals (1- and 3-year), JEPI’s option premium plus equity gains have outpaced SCHD’s high-dividend stocks, yielding a 1.7 % and 5.13 % edge, respectively, though over five years the two funds nearly converge (–0.02 %) as SCHD’s dividend-reinvestment power catches up.

Risk Metrics

JEPI’s option-writing approach naturally dampens volatility 8.88 % 1-year vs. SCHD’s 13.95 % by collecting premiums that buffer against share-price swings. Its 0.34 Sharpe ratio over three years reflects steady income relative to risk, whereas SCHD, with no downside cushion and heavier exposure to cyclical, energy, and consumer-defensive names, endures greater drawdowns and thus posts just a 0.02 Sharpe. In other words, investors seeking smoother returns might favor JEPI’s risk-managed profile, while those willing to tolerate bumps for higher upside in bull markets may prefer SCHD.

• Volatility reflects the degree of price fluctuations; higher volatility often correlates with greater risk and potential returns.
• Sharpe Ratio measures risk-adjusted returns, where higher ratios indicate more favorable returns for the risk assumed.

Dividend Yield & Growth

SCHD’s mandate to hold high–dividend-paying, fundamentally strong U.S. firms drives its roughly 4.27 % yield, more than double JEPI’s ~1.90 %. JEPI instead generates income primarily via equity-linked notes and call-premium harvesting, so its underlying dividend yield appears lower, and distributions often reflect option income monthly rather than SCHD’s quarterly payout cadence. Thus, cash-flow-hungry investors will see SCHD as the yield champion, while JEPI offers more frequent, potentially smoother paychecks supplemented by option proceeds.

Fees & Liquidity

At 0.06 %, SCHD’s rock-bottom expense ratio is a hallmark of passive indexing, keeping more returns in investors’ pockets. JEPI’s higher 0.35 % fee covers active option writing and portfolio management overhead. Bid-ask spreads and volume weren’t specified here, but in general, SCHD’s larger asset base (∼$69 B vs. JEPI’s $40 B) tends to translate into tighter spreads and deeper liquidity. Therefore, cost-sensitive or very high-volume traders might tilt toward SCHD, whereas those valuing JEPI’s income strategy may accept its modest premium.

Explanation:

• Expense Ratio is the annual fee taken by the fund manager, expressed as a % of your investment.
• Bid-Ask Spread is the difference between the buying and selling price. Smaller spreads mean lower transaction costs.

ETF Composition: Asset Classes

JEPI allocates about 83.7 % to U.S. equities, 2.4 % to non-U.S. stocks, and holds ~1 % cash reflecting its need to collateralize option positions whereas SCHD is almost entirely U.S. stocks (99.3 %) with negligible cash. Neither fund carries bonds, but JEPI’s slight cash buffer and non-U.S. slice differentiate it. Investors focused strictly on domestic dividend equities will see SCHD as purer, while those open to modest global exposure and cash reserves for option-related liquidity will note JEPI’s broader palette.

Regional Allocation

Both funds concentrate heavily in North America 97.2 % for JEPI and 99.4 % for SCHD yet JEPI includes a meaningful 2.3 % in developed Europe and 0.5 % in Asia developed/emerging, courtesy of multinational S&P 500 components and derivatives. SCHD’s single-country focus hews closer to the U.S. footprint of its dividend index. Thus, JEPI offers a tad more international diversification, while SCHD remains nearly 100 % U.S.–centric.

Sector Weights

JEPI skews toward Technology (20.7 %), Industrials (14.1 %), and Financial Services (13.2 %), reflecting the S&P 500’s tech-heavy composition and option-premium objectives. SCHD leans into Consumer Defensive (19.4 %) and Energy (18.9 %), sectors known for steadier dividends. Consequently, JEPI offers growth-tilt via big-tech, whereas SCHD tilts toward traditionally income-oriented sectors, shaping each fund’s risk-return and income profile.

Top 10 Holdings

JEPI’s top names Visa (1.74 %), Mastercard (1.72 %), Trane (1.70 %) mirror the S&P 500’s blue-chip megacaps that produce liquid option premiums. SCHD’s leaders Coca-Cola (4.29 %), Verizon (4.28 %), Cisco (4.28 %) reflect its high-dividend-screen methodology. Overlaps are rare; JEPI favors growth-oriented large caps for volatility management, while SCHD picks stalwart dividend payers, yielding distinct exposure to consumer-defensive and telecom stalwarts.

Valuation & Growth Metrics

Valuation Ratios

JEPI trades at a premium multiple P/E ~20.8×, P/B ~4.3× typical for its growth-tilted S&P 500 basket and option overlay appeal. SCHD’s lower multiples P/E ~13.7×, P/B ~2.8× signal value orientation among dividend leaders. The higher Dividend-Yield Factor for SCHD (4.27 vs. JEPI’s 1.90) further tilts its valuation downward. Investors hunting growth-style valuations with income may gravitate toward JEPI, while value-seekers and yield chasers may prefer SCHD’s more attractive price levels.

Explanation:

• P/E Ratio = Price divided by earnings. Indicates how expensive a fund is relative to profits.
• Price/Book = Price vs book value (assets minus liabilities).
• Price/Sales = Price relative to total revenue.
• Price/Cash Flow = Price relative to how much cash the companies generate.

Growth Expectations

JEPI’s underlying portfolio exhibits strong projected and historical growth ~8.5 % long-term earnings and 10.2 % realized driven by heavyweight tech and industrial innovators. SCHD, focusing on mature dividend payers, shows slower forward growth (~6.4 %) and even negative historical earnings/cash-flow rates, reflecting slower expansion in telecom, utilities, and tobacco. Those seeking higher growth potential (albeit with more volatility) will lean to JEPI, whereas income-first investors accepting flat or contracting earnings in exchange for yield may choose SCHD.

Which ETF Fits Your Portfolio - JEPI vs SCHD?

Choosing between JEPI and SCHD ultimately comes down to your objectives around income, growth, and risk tolerance. If you value steady, smoother returns with a built-in cushion against market swings, JEPI’s covered-call strategy may be the better fit. Its option premiums help dampen volatility (8.88 % 1-year vs. 13.95 % for SCHD) and provide monthly distributions, making it attractive for retirees or conservative investors seeking consistent cash flow without abrupt drawdowns. Keep in mind the higher 0.35 % expense ratio, which you’re paying for active management and option writing.

On the other hand, SCHD stands out for its higher yield (~4.27 % vs. JEPI’s ~1.90 %), lower cost (0.06 % expense), and pure exposure to blue-chip, dividend-paying U.S. equities. Its passive index approach produces tight spreads and deep liquidity, ideal for cost-conscious buy-and-hold investors who crave quarterly dividends and can tolerate market ups and downs. SCHD’s diversified sector tilt toward Consumer Defensive and Energy also offers resilience in late-cycle environments, while its long-tenure track record (since 2011) underpins a solid ~10.9 % 10-year return.

If you lean toward growth with income, JEPI’s tech-heavy, S&P 500-based portfolio coupled with option income might be your choice. If your priority is pure dividend yield and minimal fees, SCHD could better align with your goals. Consider blending both for a balanced approach: JEPI for stability and option income, SCHD for yield and cost efficiency together providing diversification across strategies within the broader U.S. equity market.