JEPI yields 8%. SCHD yields 3.4%. Sounds like an obvious choice — until you check what happened to the money.
Since JEPI launched in May 2020, $10,000 in SCHD grew to roughly $22,760 with dividends reinvested. That same $10,000 in JEPI? About $19,260. The JEPI vs SCHD total return gap: $3,500 in SCHD’s favor — while paying less than half the income along the way.
You collected bigger checks and ended up with less money. This JEPI vs SCHD comparison breaks down why — total return, dividend trajectory, tax drag, and the crossover point most yield-chasers never calculate.
JEPI vs SCHD — The Two Suspects
🔍 JEPI · Options Income Machine
Issuer: J.P. Morgan · Since: May 2020
Strategy: Active — covered calls via ELNs
Yield: ~8.0% (monthly) · Fee: 0.35%
5Y Div Growth: -5%/yr
Tax: Ordinary income (up to 37%)
AUM: ~$43B · Turnover: 172%
🔍 SCHD · Dividend Growth Engine
Issuer: Charles Schwab · Since: Oct 2011
Strategy: Passive — Dow Jones Dividend 100
Yield: ~3.4% (quarterly) · Fee: 0.06%
5Y Div Growth: +11%/yr
Tax: Qualified dividends (usually 15%)
AUM: ~$82B · Turnover: ~25%
Two numbers define this JEPI vs SCHD matchup. JEPI’s dividend is shrinking at 5% per year. SCHD’s is growing at 11%. Today’s yield screenshot favors JEPI. The trajectory underneath it does not.
How JEPI Manufactures That 8% Yield
SCHD is straightforward. It buys ~100 companies with 10+ years of consecutive dividend payments — Lockheed Martin, Chevron, Coca-Cola — and passes the dividends through. The Dow Jones U.S. Dividend 100 Index does the filtering. Nothing complex.
JEPI works differently. J.P. Morgan’s team picks low-volatility S&P 500 stocks, then sells call options on the S&P 500 through equity-linked notes (ELNs). Those option premiums become your “dividend.” Most of that 8% isn’t coming from the companies themselves — it’s derivatives income.
The trade-off is structural. When the S&P 500 rallied 26% in 2023 and 25% in 2024, JEPI captured roughly half the move. The rest went to whoever was on the other side of those options contracts. SCHD has no cap — when its holdings go up, you get the full ride.
That single mechanism — JEPI rents out your upside for monthly income — explains every data point in this JEPI vs SCHD comparison. JEPI’s yield hit 11%+ when volatility was elevated in 2022. As markets calmed through 2023–2025, premiums shrank, and so did the payout. The yield isn’t stable — it’s a volatility trade that fluctuates.
JEPI vs SCHD Top Holdings — Two Different Portfolios
| JEPI Top 5 | Weight | SCHD Top 5 | Weight |
|---|---|---|---|
| Johnson & Johnson (JNJ) | 1.73% | Lockheed Martin (LMT) | 4.73% |
| Alphabet (GOOGL) | 1.71% | Chevron (CVX) | 4.26% |
| Analog Devices (ADI) | 1.60% | Texas Instruments (TXN) | 4.24% |
| Amazon (AMZN) | 1.57% | Bristol-Myers Squibb (BMY) | 4.22% |
| AbbVie (ABBV) | 1.56% | ConocoPhillips (COP) | 4.19% |
Holdings as of early 2026. Sources: J.P. Morgan, Schwab Asset Management.
JEPI spreads thin — no single stock above 1.73%. SCHD goes heavy: its top 5 hold over 21% of the entire fund. When Lockheed Martin had a strong quarter, SCHD holders felt it. When any single JEPI holding moves, it barely registers.
Notice what JEPI holds: Amazon and Alphabet — companies that pay tiny dividends or only recently started. They’re there for low-volatility stock selection and options premium, not for income. SCHD would never touch them — its index requires 10 consecutive years of dividend payments. The overlap between the two funds is minimal, with only AbbVie appearing in both top-10 lists. In the JEPI vs SCHD comparison, you’re choosing between a derivatives income strategy and a pure dividend-growth strategy.
JEPI vs SCHD Total Return — Year-by-Year Scoreboard
| Year | JEPI | SCHD | S&P 500 | Pattern |
|---|---|---|---|---|
| 2021 | +21.50% | +29.87% | +28.71% | Bull → SCHD wins |
| 2022 | -3.52% | -3.23% | -18.11% | Bear → Tie |
| 2023 | +9.81% | +4.55% | +26.29% | Tech rally → both trail |
| 2024 | +12.58% | +11.66% | +25.02% | Moderate → ~Tie |
| 2025 | +8.11% | +4.33% | +17.88% | Bull → both trail |
Total returns include dividends reinvested. Sources: Yahoo Finance, PortfoliosLab. Data as of early 2026.
The S&P 500 column tells the real story. In 2023, the market gained 26%. JEPI captured less than 10%. SCHD got 4.55%. Both trailed badly — but for completely different reasons. SCHD missed the rally because it doesn’t hold big tech. JEPI missed it because its covered calls sold off the upside.
The only year JEPI vs SCHD was close? 2022 — the bear market. Both lost about 3% while the S&P 500 dropped 18%. But that single defensive year doesn’t compensate for trailing in every other year.
$10K Growth Test — The JEPI vs SCHD Evidence
Numbers above show annual returns. The table below shows what those returns actually did to a lump sum — the cumulative gap that yield-chasers don’t see on a monthly statement.
| Period | JEPI | SCHD | S&P 500 | Difference |
|---|---|---|---|---|
| 3 Years (2023–2025) | $13,400 | $12,180 | $18,640 | JEPI +$1,220 |
| Since JEPI Launch (May 2020) | $19,260 | $22,760 | $22,500 | SCHD +$3,500 |
| Dividends Collected | $7,110 | $3,330 | $1,280 | JEPI paid 2.1× more |
$10K invested, dividends reinvested. JEPI launch: May 20, 2020. Source: PortfoliosLab, FinanceCharts.
JEPI collected $7,110 in dividends. SCHD collected $3,330. Yet SCHD ended up $3,500 ahead in total value. That means JEPI’s higher income didn’t even compensate for its lower price growth — you collected more and ended up with less. That’s the JEPI vs SCHD yield trap in a single table.
The 3-year slice is important, too. JEPI actually leads over 2023–2025 by $1,220. The lesson: in shorter, moderate-volatility windows, JEPI’s income advantage holds up. It’s over 5+ years that the compounding gap takes over and SCHD pulls ahead decisively.
The Dividend Crossover — When SCHD Catches JEPI
JEPI’s yield was 11%+ in 2022. Now it’s around 8%. The direction matters more than the starting point. JEPI’s income is tied to market volatility — when the VIX drops, so do the option premiums that fund its payout.
SCHD’s dividend is tied to corporate earnings. Companies like Coca-Cola and Chevron raise dividends through bull and bear markets alike. For more on how SCHD’s dividend engine works, see our full SCHD ETF review.
On $100K invested, here’s how the annual income evolves if both trends continue at historical rates:
| Year | JEPI Income | SCHD Income | Gap |
|---|---|---|---|
| Today | $8,000 | $3,400 | JEPI +$4,600 |
| Year 3 | $6,860 | $4,650 | JEPI +$2,210 |
| Year 5 | $6,190 | $5,730 | JEPI +$460 |
| Year 6 | $5,880 | $6,360 | ⚡ Crossover |
| Year 10 | $4,790 | $9,650 | SCHD +$4,860 |
| Year 15 | $3,710 | $16,270 | SCHD +$12,560 |
Assumptions: JEPI yield declining -5%/yr from 8% (historical trend). SCHD yield growing +11%/yr from 3.4% (5-year CAGR). Same $100K, no reinvestment.
Year 6 is the JEPI vs SCHD crossover. After that, SCHD accelerates away. By year 10, it pays roughly 2× more income. By year 15, SCHD generates $16,270 annually from the same original investment while JEPI has dropped to $3,710. Today’s 8% looks spectacular, but the trajectory beneath it is heading the wrong direction.
⚠️ Important caveat: JEPI has less than 6 years of history. Projecting 15 years from 5 years of data is inherently speculative. JEPI’s yield won’t necessarily keep declining at -5% forever — a spike in volatility could push premiums back up overnight. And SCHD’s 11% dividend growth rate could slow if corporate earnings stall. These projections show what happens if both historical trends continue at their current rate. Use them as directional guidance, not as forecasts.
🧮 JEPI vs SCHD Income Crossover Calculator
[qfl_calculator type=”jepi-schd”]The Tax Problem in JEPI vs SCHD
JEPI’s distributions are mostly taxed as ordinary income — your highest marginal rate, up to 37%. SCHD’s dividends qualify for the qualified dividend rate: 0%, 15%, or 20% depending on your bracket.
On $100K invested, JEPI pays ~$8,000 in income. At a 32% bracket, you keep $5,440 after tax. SCHD pays ~$3,400, taxed at 15%, leaving you $2,890. The after-tax JEPI vs SCHD income gap shrinks from $4,600 to $2,550 — almost half the headline difference disappears to the IRS.
And JEPI’s 172% annual turnover creates additional taxable events throughout the year. SCHD’s ~25% turnover barely generates any. In a taxable brokerage account, the tax drag alone costs thousands over a decade. For a broader look at how dividend ETFs handle taxes versus growth funds, our SCHD vs VOO comparison breaks it down further.
In a Roth IRA, taxes don’t matter — but then you’re using your most valuable tax-advantaged space on a fund whose price grows at only ~3% per year. That same Roth space could hold QQQ or VTI compounding at 15%+.
JEPI vs SCHD Risk Profile
JEPI’s covered call premiums cushion declines — and in a bear market, that cushion is real. But risk-adjusted returns tell a more complete story than drawdowns alone.
| Metric | JEPI | SCHD | Edge |
|---|---|---|---|
| Max Drawdown* | -13.7% | -33.4% | *Different periods |
| Annualized Volatility | 10.2% | 16.1% | JEPI (smoother ride) |
| Beta (vs S&P 500) | 0.55 | 0.75 | JEPI (less market exposure) |
| Sharpe Ratio | 0.66 | 1.11 | SCHD (68% more return/risk) |
| Correlation (JEPI↔SCHD) | 0.79 | Real diversification | |
JEPI: since inception (May 2020). SCHD: since inception (Oct 2011). Drawdown periods differ — see note below table. Source: PortfoliosLab.
JEPI wins every raw volatility metric. Max drawdown of -13.7% versus SCHD’s -33.4% looks like a massive gap — but there’s a catch. SCHD’s worst drawdown happened during the March 2020 COVID crash. JEPI launched two months later. It never experienced that downturn.
The only bear market both funds lived through is 2022. That year, JEPI dropped -13.7% while SCHD fell roughly -16%. The gap is real but far narrower than the headline numbers suggest. For anyone already retired and living off their portfolio, even that narrower gap matters — a 13% dip is easier to stomach than 16%.
But SCHD’s Sharpe ratio of 1.11 is 68% higher than JEPI’s 0.66 — meaning SCHD delivers significantly more return per unit of risk taken. Less volatile doesn’t automatically mean better; it just means smaller moves in both directions.
One detail worth noting: the JEPI vs SCHD correlation is 0.79. That’s lower than most ETF pairs — VOO and SPY sit at 1.00, for example. JEPI and SCHD genuinely move differently, which means holding both could add diversification value that you won’t get from most other combinations.
Fees — 6× the Cost in the JEPI vs SCHD Matchup
JEPI charges 0.35%. SCHD charges 0.06%. On $100,000, that’s $350 per year versus $60 — a $290 annual gap. Over 10 years at 8% average returns, the JEPI vs SCHD fee drag alone costs roughly $4,200 in lost compounding.
JEPI’s fees are understandable — it’s actively managed, running a complex options overlay with equity-linked notes. That costs money to execute. But the result is a fund charging nearly 6× more in fees while delivering lower total returns than SCHD’s passive index strategy. The fee difference compounds against you in the same way returns compound for you.
📈 JEPI vs SCHD — Live Price Comparison
JEPI vs SCHD — Case Closed
📋 Case Closed · The Evidence Points One Way
For most investors with 5+ years before they need income, SCHD wins the JEPI vs SCHD comparison on total return, dividend trajectory, fees, and tax efficiency.
JEPI works if →
You’re already retired and need maximum monthly cash flow now. You can’t wait 6 years for SCHD to catch up. A 33% drawdown would derail your retirement plan. Ideally held in a tax-advantaged account to avoid ordinary income rates.
SCHD works if →
You have time. You want a dividend that grows 11%/yr, not one that shrinks. You care about total return, lower fees (0.06% vs 0.35%), and qualified dividend tax treatment. For a broader comparison, see our SCHD vs VOO breakdown.
Hold both (with intention) →
A 70% SCHD / 30% JEPI split gives growing dividends as the core with JEPI smoothing volatility. This makes sense within 5–10 years of retirement. If retirement is 15+ years out, skip JEPI and put that allocation into VOO for growth. Working toward FIRE? The savings rate matters more than whether dividends arrive monthly or quarterly.
JEPI isn’t in my portfolio right now. With a long runway ahead, every dollar I own should be compounding — and JEPI’s ~3% price CAGR doesn’t compete with SCHD’s ~9.8% total return or QQQ at 15%+. Could that change closer to retirement? Probably. But that’s a decision for a different decade.
The Evidence That Decides It
- $3,500 total return gap in SCHD’s favor since JEPI’s launch — despite JEPI paying 2.1× more in dividends.
- Year 6 crossover: SCHD’s growing dividend overtakes JEPI’s shrinking one. By year 15, SCHD pays 4.4× more annually.
- Tax drag halves the gap: JEPI’s ordinary income tax (up to 37%) vs SCHD’s qualified rate (15%) erases nearly half the headline income advantage.
- JEPI’s one real edge is volatility: In 2022 (the only downturn both funds lived through), JEPI fell -13.7% vs SCHD’s roughly -16%. SCHD’s larger -33.4% all-time drawdown was during COVID — a crash JEPI never experienced.
- Sharpe ratio favors SCHD 68%: More return per unit of risk, which is the metric that matters most over a full cycle.
- 0.79 correlation means JEPI + SCHD together adds real diversification — unlike most ETF pairs.
- 6× fee gap: JEPI charges 0.35% vs SCHD’s 0.06%. That’s $290/yr more on $100K, compounding against you over every year you hold it.
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Common Questions About JEPI and SCHD
Is JEPI or SCHD better for retirement income?
Depends on your timeline. Need cash flow today? JEPI pays $4,600 more per year on $100K. But wait 6 years and SCHD’s growing dividend overtakes JEPI’s shrinking one. Retirees already spending down may prefer JEPI. Pre-retirees building a portfolio are better off with SCHD.
Why is JEPI’s yield so high?
Most of JEPI’s income comes from selling options on the S&P 500 through equity-linked notes, not from dividends paid by the underlying companies. When volatility is high, those premiums are large. As volatility dropped through 2023–2025, the yield fell from 11%+ to around 8%.
Can I hold both JEPI and SCHD together?
Yes, and the 0.79 correlation means they genuinely move differently enough to add value. A 70/30 SCHD/JEPI split gives dividend growth as the core with JEPI adding near-term cash flow and volatility dampening. Most useful within 5–10 years of retirement.
Should young investors buy JEPI?
Generally not ideal. JEPI’s price appreciation is only about 3% annually. Young investors benefit more from total return compounding — SCHD’s total return has averaged roughly 9.8% per year, and QQQ has averaged 15%+. Monthly income feels good but costs significant growth over 20+ years.
How are JEPI vs SCHD dividends taxed differently?
JEPI distributions are mostly ordinary income, taxed at your highest marginal rate (up to 37%). SCHD dividends qualify for the lower qualified dividend rate (0–20%, typically 15%). On the same dollar of income, that 15–22% tax gap adds up to thousands over a decade.
Is JEPI a good hedge against market crashes?
Partially. During the 2022 bear market — the only downturn both funds experienced — JEPI fell -13.7% while SCHD dropped roughly -16%. SCHD’s larger -33.4% all-time drawdown happened during COVID in 2020, before JEPI existed. The covered call premiums provide a real income cushion during downturns, but JEPI isn’t a true hedge — it still holds equities and will decline in a severe crash.