SCHD vs JEPI: Side-by-Side ETF Comparison

SCHD vs JEPI comes down to dividend approach: SCHD offers 3.82% yield with a focus on consistent dividend-paying value stocks at 0.06% fees, while JEPI delivers 8.25% yield through an options strategy that costs 0.35% annually. The trade-off is SCHD's lower but more sustainable dividend growth versus JEPI's higher current income with added complexity from derivatives.

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

Charles Schwab's SCHD takes a straightforward approach: own quality U.S. companies that actually pay their dividends. The fund tracks an index that screens for consistent dividend payers with solid fundamentals, then weights them by how strong their balance sheets look relative to peers. You'll find value-oriented sectors here - energy stocks make up over 20% of the portfolio, followed by consumer staples at 18%. The 0.06% expense ratio means Schwab only pockets six cents for every hundred you invest, which helps explain why SCHD has become the go-to choice for dividend-focused investors.

JPMorgan's JEPI plays a different game entirely. Instead of just buying dividend stocks, the fund sells call options against its equity holdings through equity-linked notes. This options strategy generates that eye-catching 8.25% yield - more than double SCHD's 3.82% - but it caps the fund's upside when markets rally hard. The portfolio looks more like the S&P 500, with nearly 19% in technology names and a higher P/E ratio of 21 versus SCHD's 13.7. You're paying JPMorgan 0.35% annually for this active management, which is cheaper than most covered-call funds but still nearly six times SCHD's fee.

Annual & Cumulative Returns

The performance gap between these two income strategies tells a clear story. SCHD's 6.23% year-to-date return nearly triples JEPI's 1.99%, and the dividend-focused fund maintains this edge across every time period except three years. What jumps out is the consistency - SCHD's 12.81% ten-year average (compared to JEPI's nonexistent track record) suggests the strategy has weathered multiple market cycles. The 3.6 percentage point difference in their 1-year returns might seem modest, but it represents real money when you're talking about income-focused portfolios.

JEPI's options-writing approach shows up in the numbers. The fund's 10.45% three-year return beats SCHD by nearly two full percentage points, likely from capturing options premiums during calmer markets. Yet this advantage evaporates over five years, where both funds essentially tie at 9.66% and 9.68%. The pattern hints that JEPI's complexity helps in stable conditions but doesn't provide lasting outperformance. For investors choosing between them, it comes down to preference: SCHD offers simpler dividend investing with a longer proven record, while JEPI provides higher current income but with less history and more moving parts.

Risk Metrics

JEPI's volatility sits remarkably low at 6.25% over the past year, barely half of SCHD's 11.45%. That gap holds across the longer window too - JEPI's three-year volatility of 7.42% against SCHD's 12.61% shows the option-writing strategy genuinely dampens price swings. The Sharpe ratios reveal why this matters: JEPI earned 0.69 units of return per unit of risk while SCHD managed only 0.20, meaning JEPI investors got paid better for the uncertainty they accepted.

Yet these numbers come with trade-offs. SCHD's higher volatility reflects its full exposure to stock market moves - when dividend stocks rally, shareholders capture the upside. JEPI's call-option overlay caps those gains in exchange for premium income, which explains both the lower volatility and the muted one-year return of 7.26% despite an 8.25% yield. For investors who can stomach 12% volatility, SCHD offers the purer equity play. Those prioritizing stability might accept JEPI's return profile for the smoother ride.

Dividend Yield & Growth

JEPI's 8.25% yield is more than double SCHD's 3.82%, and that gap is what most income shoppers notice first. The extra four-and-a-half percentage points of cash flow come from a deliberate trade-off: JEPI sells call options against its equity holdings, collecting premiums that are passed along as dividends. Those premiums juice the payout, but they also cap the fund's upside in strong rallies, something the raw yield figure doesn't show.

SCHD's lower yield is simply the market's dividend; the fund just screens for companies that grow it reliably. No options overlays, no monthly bonus checks, just the cash that firms like Amgen, Chevron and PepsiCo already mail to shareholders. What you give up in current income you keep in compounding potential, because every dollar not paid out today stays invested and, history suggests, tends to grow faster than the S&P 500 over full cycles. Pick your preference: JEPI pays you now, SCHD pays you later.

Fees & Liquidity

The fee gap between these two couldn't be starker. SCHD charges just 0.06% annually, meaning you'll pay $6 on every $10,000 invested. JEPI's 0.35% expense ratio runs nearly six times higher at $35 per $10,000. That $29 difference might seem trivial until you consider it compounds year after year, especially if you're building a long-term position.

What you're really paying for with JEPI is active management and its options strategy, which requires more hands-on portfolio adjustments than SCHD's straightforward dividend-stock approach. The higher fee essentially buys you that hefty 8.25% yield, though remember that yield comes from both dividends and options premiums, not just stock appreciation. SCHD's rock-bottom costs make it ideal for buy-and-hold investors who want pure dividend exposure without the complexity premium.

ETF Composition: Asset Classes

SCHD keeps things simple with a near-pure domestic focus, parking 99.1% of assets in U.S. equities and leaving only token amounts in cash or overseas names. That single-market bet lets the portfolio hew tightly to its large-value mandate and keeps currency swings out of the equation. JEPI, by contrast, keeps 16.5% of its assets outside direct U.S. stock exposure 1.4% sits in cash and another 1.4% in non-U.S. names, while the rest backs the ELN overlay that generates its extra income. The cash and derivatives sleeve is what powers the fund’s 8.25% yield, but it also means shareholders are less tethered to the market’s upside and carry counter-party risk inside those option structures.

For investors, the difference is more than a rounding error. SCHD’s 99% equity weight means every dollar participates fully in dividend-paying U.S. companies, which explains both its lower 3.82% yield and its slightly higher 12-month return of 7.80%. JEPI’s 83.5% direct stock stake leaves a chunk of assets earning option premiums instead of stock appreciation, producing a juicier distribution but capping some upside and adding complexity. If you want straight equity exposure with a value tilt, SCHD’s allocation delivers it cleanly; if you’re willing to trade some market participation for monthly income and a layer of derivatives, JEPI’s mixed-bag structure is the price of admission.

Regional Allocation

Both ETFs keep their money close to home, with SCHD allocating 99.2% to North America and JEPI right behind at 98.4%. SCHD's tiny 0.8% overseas slice is scattered across UK and Latin American stocks, while JEPI's 1.6% foreign weighting sits entirely in developed European markets. For dividend-focused investors, this means you're getting almost pure U.S. exposure with either fund, though the slight geographic tilt reflects their different approaches to generating income.

The minimal international exposure explains why both funds tend to move in lockstep with U.S. market sentiment rather than benefiting from overseas diversification when foreign markets outperform. SCHD's dividend screening process naturally favors domestic companies with long payout histories, while JEPI's options strategy is built around S&P 500 stocks that happen to be U.S.-based. Neither fund will help much if you're looking to hedge against a weak dollar or tap into faster-growing emerging markets.

Sector Weights

SCHD leans hard into old-economy cash cows: one-fifth of the portfolio sits in energy pipelines and refiners, another 18 % is parked in consumer-staples giants that make the everyday items people buy without thinking. Add healthcare’s 15 % slice and you have more than half the fund in three defensive groups that tend to keep sending dividends even when GDP sneezes. The trade-off is visible in the single-digit weights for tech (9 %) and financials (9 %), leaving the portfolio light on the sector that has driven most of the market’s gains over the past decade.

JEPI flips that script. Technology clocks in at 19 %, nearly double SCHD’s share, while energy is trimmed to just 2 % and consumer staples drop to 8 %. The result is a basket that looks a lot more like the modern S&P 500, only with a 6 % utilities allocation and a 5 % real-estate sleeve that SCHD barely touches. For income investors, the takeaway is straightforward: SCHD’s sector mix is built to cushion volatility and protect the dividend stream, whereas JEPI’s broader, growth-tilted spread aims to keep pace with the index while still churning out its eye-catching 8 % yield.

Top 10 Holdings

SCHD's top five holdings make up a chunky 21% of the portfolio, with Lockheed Martin leading at 4.7% and the rest clustered just above 4%. That concentration in dividend stalwarts like Chevron and Bristol-Myers Squibb shows the fund's bias toward cash-rich companies trading at reasonable prices. Each position carries real weight here - when these stocks move, you'll feel it in your returns.

JEPI takes a completely different approach. Its largest holding, Analog Devices, commands just 1.7% of assets, and even mega-caps like Alphabet barely crack 1.6%. This extreme diversification stems from the fund's options strategy - it needs broad market exposure to hedge its covered calls, so no single stock can dominate. The result is a portfolio where individual stock risk gets diluted across hundreds of names, though you'll sacrifice the pure dividend focus that gives SCHD its value tilt.

Valuation & Growth Metrics

SCHD trades at a noticeable discount across every valuation metric - its 13.7 P/E and 2.7 price-to-book sit well below JEPI's 21.1 and 4.3 respectively. That's what happens when you build a portfolio around beaten-up value names like energy stocks and consumer staples. The catch? Those cheaper holdings grew earnings at just 5.6% long-term while shrinking 1.7% over the past five years. You're paying less because the market expects less.

JEPI's higher 21 P/E reflects its tech-heavy portfolio and stronger growth profile - 8.7% long-term earnings growth and 11% historical growth tell the story. The 3.2 price-to-sales ratio doubles SCHD's, but that premium bought significantly faster expansion. Neither approach is inherently better; SCHD offers a value play with steady dividends while JEPI provides growth exposure at a richer price. Your choice depends on whether you want cheaper, slower-growing companies or faster growers at a premium.

Which ETF Fits Your Portfolio?

If you’re after yield with a side of growth, SCHD’s 3.8% payout and 0.06% fee give you a cheap, straightforward way to own cash-rich value stocks that have actually raised their dividends for years. The trade-off is you’ll ride the usual equity swings; last year’s 7.8% return came with full market beta and a portfolio tilted toward energy and consumer staples.

JEPI’s 8.3% yield looks twice as juicy, but that income is manufactured by selling call options on the S&P 500, so expect most of the upside to be called away in strong rallies and a 0.35% expense ratio eating a bigger hole in the distribution. Pick SCHD when you want dividend growth and lower fees, choose JEPI when you need the higher cash flow today and are willing to accept a cap on gains and a tech-heavier, derivative-wrapped basket.

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.