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Innovative Passive-Income ETFs for Consistent Monthly Payoff 2 Incredible Passive-Income Vehicles That Pay You Monthly

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Looking for a reliable source of passive income to bolster your retirement plan? Your search might just end here. The stock market is teeming with passive-income vehicles, and some exchange-traded funds (ETFs) offer investors monthly dividend checks. Particularly, two standout performers are the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ) and the JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI), leveraging the strategy of covered call writing to generate monthly dividends.

Wooden blocks with passive income written on them and stacked in a manner indicating growth.

Image source: Getty Images.

Now, let’s delve into these top passive-income opportunities.

Exploring the JPMorgan Nasdaq Equity Premium Income ETF

With the Nasdaq 100 index as its prospectus benchmark, the JPMorgan Nasdaq Equity Premium Income ETF gleans monthly income by selling covered calls and receiving dividends from its stock holdings. This ETF boasts a scorching annualized yield of 9.73% at the current juncture, albeit with somewhat pronounced fluctuations due to its unique strategy.

However, given its actively managed nature, the JEPQ has a high turnover rate and its holdings may deviate significantly from its benchmark. That said, its expense ratio of 0.35% is justifiable for an actively managed fund delivering a notable yield. Over the past year, it has notably outperformed the S&P 500, attributed to the stellar performance of its top holdings like Microsoft and Nvidia. Nonetheless, the fund’s primarily premium-laden tech holdings carry unique risks, especially in a scenario of tech slowdown amid an economic downturn.

JEPQ Total Return Level Chart

JEPQ Total Return Level data by YCharts.

However, the high yield and consistent income generation make JEPQ a compelling addition to an income-oriented portfolio, notwithstanding its idiosyncratic risks.

Introducing the JPMorgan Equity Premium Income ETF

Utilizing the S&P 500 as its benchmark index, the JPMorgan Equity Premium Income ETF employs a similar strategy of selling covered calls and collecting dividends to generate monthly income. This ETF primarily focuses on large-cap U.S. stocks, boasting a robust 8.26% annualized distribution at present.

The JEPI has delivered substantial returns but slightly lagged behind the red-hot S&P 500 over the past year. However, given its primary objective of generating stable income, this ETF remains a valuable addition to an income-oriented portfolio, ticking the boxes of steady income generation without significant value erosion.

^SPX Chart

^SPX data by YCharts.

This ETF can be an excellent income generator despite trailing the broader market over a specified period, making it an attractive inclusion in an income-focused investment basket.

Should you invest $1,000 in J.p. Morgan Exchange-Traded Fund Trust – JPMorgan Nasdaq Equity Premium Income ETF right now?

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, JPMorgan Chase, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Progressive and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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