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Additionally, the incorporation of actively managed dividend ETFs, such as high-income covered call ETFs, allows for an advanced strategy of utilizing the options market to enhance dividend yields.
Selecting the Right ETFs
In the pursuit of creating a robust portfolio, three specific ETFs stand out, fulfilling the criteria outlined above:
JP Morgan NASDAQ Equity Premium Income ETF (JEQ): This ETF sells covered calls on the NASDAQ 100, has strong capital appreciation potential, and boasts a near 10% dividend yield.
JP Morgan Equity Premium Income ETF (JEPI): Utilizing a strategy similar to JEQ, JEPI focuses on low-volatility and value stocks within the S&P 500. It typically offers a 7% dividend yield while minimizing downside risk due to its low volatility nature.