JEPI vs SCHD: Side-by-Side ETF Comparison

JEPI vs SCHD comes down to income versus value: JEPI's covered-call strategy generates a hefty 8.25% yield but costs 0.35% annually, while SCHD offers a more modest 3.82% yield at just 0.06% in fees and owns cheaper stocks (13.7x vs 21.1x P/E). One-year returns were nearly identical at 7-8%, so your choice depends on whether you want maximum monthly income or long-term dividend growth from undervalued companies.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

JPMorgan's JEPI takes an unusual path for an equity fund by mixing plain vanilla stocks with equity-linked notes that sell call options against the S&P 500. This derivatives overlay lets the fund harvest extra income from option premiums, which explains how it currently throws off an 8.25% yield while holding familiar large-cap names (19% technology, 14.8% healthcare). The trade-off is built-in: those sold calls cap some upside, so the fund's 7.26% one-year return trails the broader market, but management argues the cushion should soften downdrafts.

Charles Schwab's SCHD sticks to a much simpler playbook. It screens the U.S. market for companies that have paid dividends for at least ten consecutive years, then ranks them on cash-flow strength, return on equity, dividend growth and payout sustainability. The result is a value-leaning basket trading at 13.7 times earnings and yielding 3.8% - about half JEPI's payout - but with a 7.8% one-year return that edges ahead. Sector weights lean toward cash-rich energy (20.6%) and consumer staples (18.2%) rather than tech, giving the portfolio a defensive tilt that has held up well when growth stocks wobble.

Annual & Cumulative Returns

SCHD has the momentum right now, outpacing JEPI by more than three percentage points year-to-date and edging it out over the past year. The real eye-opener is the ten-year window: SCHD's 12.81% annualized return while JEPI didn't exist for most of that stretch. Three-year numbers flip the script, though - JEPI's 10.45% beats SCHD's 8.5%, showing how its covered-call strategy can juice returns when markets cooperate.

The pattern here tells a simple story. JEPI's option-writing approach tends to lag in strong up markets (like 2024's tech rally) but provides better downside cushioning when things get choppy. Meanwhile, SCHD's focus on dividend-quality stocks gives it more pure equity exposure - great for long-term growth, but you'll feel the bumps more along the way. Your choice depends on whether you want SCHD's higher total-return potential or JEPI's fatter monthly distributions.

Risk Metrics

JEPI's volatility sits remarkably low at 6.25% over the past year, roughly half of SCHD's 11.45%. This isn't a fluke - the three-year numbers show the same pattern, with JEPI's 7.42% still well below SCHD's 12.61%. The options-writing strategy that generates JEPI's hefty 8.25% yield also acts as a volatility dampener, selling off some upside potential in exchange for smoother price action.

The Sharpe ratio tells the rest of the story. JEPI clocks in at 0.69, meaning investors are getting better risk-adjusted returns despite the lower headline numbers. SCHD's 0.2 Sharpe suggests you're taking on considerably more price swings for each unit of return. For investors who check their portfolios daily or need steady cash flow without the roller-coaster feeling, JEPI's approach has clear appeal. Just remember that lower volatility today doesn't guarantee smoother sailing tomorrow - the options strategy that tames the downs also caps the ups when markets really take off.

Dividend Yield & Growth

The yield gap between these two funds is striking. JEPI's 8.25% payout dwarfs SCHD's 3.82%, reflecting their fundamentally different approaches to generating income. That extra 4.43 percentage points of yield comes from JEPI's use of covered call strategies through equity-linked notes - essentially the fund sells upside potential for immediate income. This options overlay creates a higher cash flow stream, though it caps some of the fund's participation in strong bull markets.

SCHD's more modest yield stems from its focus on companies with consistent dividend growth rather than maximum current income. The fund screens for quality companies that have paid dividends for at least 10 consecutive years, which tends to produce steadier but lower yields. This approach means SCHD investors trade immediate income for potentially more reliable payments and the possibility of dividend increases over time. Neither fund's dividend frequency is specified, though both typically pay monthly - a schedule that appeals to investors seeking regular cash flow.

Fees & Liquidity

The fee difference between these two funds is stark. SCHD charges just 0.06% annually, meaning you'll pay $6 per year on a $10,000 investment. JEPI costs nearly six times more at 0.35%, which translates to $35 on the same investment. That $29 difference might seem trivial, but it compounds over time and becomes particularly meaningful since both funds target income-focused investors who may be more fee-sensitive.

Trading costs favor SCHD as well. With $6.5 billion in assets and higher daily volume, SCHD typically trades with tighter bid-ask spreads than JEPI's $33.9 billion fund. The options strategy behind JEPI requires more active management, contributing to its higher expense ratio, while SCHD simply tracks an index of dividend aristocrats. For investors prioritizing low costs and straightforward dividend exposure, SCHD's fee advantage is compelling. JEPI's higher fees might be justified if its covered call strategy consistently delivers superior risk-adjusted returns, but that's a bigger "if" than many income investors want to bet on.

ETF Composition: Asset Classes

JEPI keeps a sliver of its assets in cash (1.4%) and a token 1.4% outside the U.S., but the real story is the 14% that sits in equity-linked notes. Those ELNs are what let the fund sell call options on the S&P 500, turning part of the portfolio into an income engine rather than straight equity exposure. SCHD, by contrast, is almost a pure-play on U.S. large caps 99% stocks, barely a tenth of a percent in cash, and only 0.8% foreign names. Nothing fancy, just a straight basket of dividend-paying American companies.

For investors, the takeaway is risk profile, not geography. JEPI’s 83% equity stake understates how much market beta you’re getting; the option overlay dampens upside and cushions downside, so the asset-class pie chart only tells part of the story. SCHD’s near-total U.S. allocation means you’re taking the full ride on domestic large-cap value, with no option cushion and only minimal cash drag. If you want the highest net stock exposure, SCHD delivers it. If you’re willing to trade some equity purity for monthly income, JEPI’s structure is what makes that 8%-plus yield possible.

Regional Allocation

Both JEPI and SCHD keep their portfolios almost entirely inside North America 98.4% and 99.2% respectively so neither fund gives you much of a foreign hedge. The difference is in the slivers that leak out: JEPI’s 1.6% is parked in developed Europe, while SCHD’s 0.8% is split between U.K. listings and a microscopic 0.07% in Latin America. In practice, that means a JEPI holder is getting a touch of euro-zone large-cap exposure through the ELN overlay, whereas SCHD’s overseas slice is basically a rounding error made up of London-listed multinationals that still invoice in dollars.

For U.S.-based investors, the takeaway is that currency and regional risk are nearly identical between the two. If you’re building a global sleeve, you’ll still need separate international funds no matter which one you pick. The choice here comes down to how the underlying strategies treat that domestic beta JEPI trims volatility by overwriting calls on the S&P 500, while SCHD screens for consistent dividend growers rather than where the securities happen to be domiciled.

Sector Weights

JEPI spreads its bets fairly evenly across the market's cyclical corners, with tech accounting for 19% of assets, industrials another 13.7%, and healthcare close behind at 14.8%. That mix leaves the fund with only a 2.2% sliver in energy and 3.2% in real estate, two areas that often march to their own drummer. The result is a portfolio that tracks the S&P 500's sector footprint while still leaving room for the managers to tilt slightly toward whatever looks attractive that month.

SCHD, by contrast, has planted one-fifth of its money right in energy stocks and nearly 18% in consumer-defensive names like toothpaste makers and grocery chains. Technology gets less than 10%, barely half of JEPI's weight, while utilities are almost absent at 0.05%. For investors, that means SCHD behaves more like a classic dividend screen: heavy in cash-rich sectors that can mail you a check every quarter, but lighter in the growth engines that typically lead when markets rip higher.

Top 10 Holdings

JEPI's top holdings look like a who's who of mega-caps with a twist - Analog Devices leads at just 1.72%, and even Amazon barely cracks 1.55%. That's because JEPI caps individual positions around 2% through its options strategy, so you're getting a deliberately diluted version of the S&P 500's biggest names. The fund's essentially spreading its bets thin while generating income from those equity-linked notes.

SCHD takes the opposite approach, letting winners run much larger. Lockheed Martin dominates at 4.69%, with Chevron and Bristol-Myers both topping 4%. These concentrated positions reflect SCHD's focus on companies with consistent dividend growth and strong fundamentals - think established cash cows rather than growth stories. The result is a portfolio that feels more like a traditional dividend investor's hand-picked selections, where conviction matters more than diversification.

Valuation & Growth Metrics

JEPI trades at 21 times earnings, nearly 55% higher than SCHD's 13.7 P/E, and the gap widens further when you look at book value - JEPI's 4.3 P/B ratio towers over SCHD's 2.7. These numbers reflect JEPI's tech-heavy portfolio (19% allocation) versus SCHD's value tilt toward energy and consumer staples. The premium makes sense when you consider JEPI's holdings have delivered 11% annual earnings growth over the past five years, while SCHD's value-oriented companies actually saw earnings shrink by 1.7% annually.

The growth story flips when you look forward though. JEPI's companies are expected to grow earnings at 8.7% long-term, only modestly ahead of SCHD's 5.6% projection. Sales growth shows a similar pattern - JEPI's 7% rate beats SCHD's 4.3%, but not by the margin you'd expect given the valuation gap. For investors, this suggests you're paying a hefty premium for JEPI's growth characteristics that may not materialize, while SCHD offers a more defensive profile at value prices. The choice comes down to whether you believe JEPI's tech and healthcare exposure justifies paying nearly twice the valuation multiples.

Which ETF Fits Your Portfolio?

JEPI's 8.25% yield screams income, but that eye-popping number comes from a complex options strategy that caps your upside when markets rocket. The fund's 0.35% expense ratio is reasonable for an active strategy, yet it's nearly six times what you'd pay for SCHD's straightforward approach to dividend stocks.

SCHD gives you a more traditional dividend play with its 3.82% yield and lower 13.73 P/E ratio, suggesting the portfolio trades at a noticeable discount to JEPI's holdings. The 0.06% expense ratio leaves more money in your pocket, and the 7.80% one-year return slightly edges out JEPI's 7.26% despite the lower yield. If you need maximum income now and understand the trade-offs, JEPI fits. For long-term investors who prefer simplicity and keeping more of what they earn, SCHD makes more sense.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.