QQQI vs. JEPQ: Comparing Top Income ETFs for Investors

Jul 10, 2024, 12:36AM | Investment Ideas

Investors seeking income-generating ETFs are faced with a choice between QQQI (Defiance Nasdaq 100 Enhanced Options Income ETF) and JEPQ (JPMorgan Nasdaq Equity Premium Income ETF). This report aims to provide a comprehensive analysis of these two funds, evaluating their performance, risk, and potential implications for investors. By synthesizing information from various sources, we will determine which fund may be better suited for income-focused investors.


Income-focused investors often seek ETFs that provide high dividend yields while managing risk effectively. QQQI and JEPQ are two such ETFs that have garnered attention. This report will delve into their performance metrics, risk profiles, and other relevant factors to provide a clear comparison. We will also consider recent market developments and their potential impact on these funds.

    Performance Metrics

    Dividend Yield

    One of the primary considerations for income-focused investors is the dividend yield. According to the provided summaries, QQQI boasts a significantly higher dividend yield for the trailing twelve months at 57.39%, compared to JEPQ’s 8.79%. This stark difference suggests that QQQI may be more attractive for investors prioritizing immediate income.

    Martin Ratio

    The Martin ratio, which measures risk-adjusted return, is another critical metric. JEPQ has a higher Martin ratio of 16.28 compared to QQQI’s 4.34. This indicates that JEPQ has performed better on a risk-adjusted basis, suggesting that it may offer more stable returns relative to the risk taken.

    Maximum Drawdown

    Maximum drawdown measures the largest peak-to-trough decline in the fund’s value. QQQI has a smaller maximum drawdown of -5.46% compared to JEPQ’s -16.82%. This suggests that QQQI may be less risky in terms of potential losses, making it a safer option during market downturns.


    Volatility is a measure of the price fluctuations of an ETF. QQQI has a higher volatility at 1.69% compared to JEPQ’s 1.01%. Higher volatility indicates that QQQI’s price experiences larger fluctuations, making it riskier than JEPQ based on this measure.

    Risk Profile

    Sharpe Ratio

    While the provided summaries do not offer a direct comparison of the Sharpe ratios for QQQI and JEPQ, it is essential to consider this metric when evaluating risk-adjusted returns. The Sharpe ratio helps investors understand how much excess return they are receiving for the extra volatility endured. Further research would be necessary to obtain these figures for a more comprehensive risk assessment.

    Fund Inception and Net Assets

    JEPQ was incepted earlier than QQQI, with JEPQ having been around for two years compared to QQQI’s more recent inception. Additionally, JEPQ has significantly more net assets ($301 billion) compared to QQQI ($15.3 billion). The larger asset base of JEPQ may provide more stability and liquidity, which can be advantageous for investors.

    Market Trends and Recent Developments

    Technology Sector Performance

    Both QQQI and JEPQ are linked to the Nasdaq 100, which is heavily weighted towards technology stocks. As of July 2024, the technology sector has experienced significant growth, driven by advancements in artificial intelligence, cloud computing, and cybersecurity. This growth has positively impacted ETFs linked to the Nasdaq 100, including QQQI and JEPQ.

    Interest Rate Environment

    The current interest rate environment also plays a crucial role in the performance of income-focused ETFs. With central banks maintaining relatively low interest rates to support economic growth, high-yielding ETFs like QQQI and JEPQ become more attractive to investors seeking better returns than traditional fixed-income securities.

    Potential Implications for Investors

    Income Generation

    For investors primarily focused on income generation, QQQI’s higher dividend yield makes it an attractive option. However, the higher yield comes with increased volatility, which may not be suitable for all investors.

    Risk Management

    JEPQ’s higher Martin ratio and lower volatility suggest that it may be a better choice for risk-averse investors. The fund’s larger asset base and longer track record also provide additional stability.

    Long-Term Growth

    Investors seeking long-term growth should consider the underlying holdings and sector allocations of both ETFs. Given the technology sector’s strong performance, both QQQI and JEPQ are well-positioned for future growth. However, the higher volatility of QQQI may result in more significant price fluctuations, which could impact long-term returns.

    Conflicting Viewpoints

    Dividend Yield vs. Stability

    There is a clear trade-off between dividend yield and stability. While QQQI offers a higher yield, it comes with increased volatility and potential risk. On the other hand, JEPQ provides more stable returns but with a lower yield. Investors must weigh these factors based on their risk tolerance and income needs.

    Market Timing

    Some investors may argue that timing the market is crucial when investing in high-yield ETFs. Given the current market conditions, with technology stocks performing well, both QQQI and JEPQ are likely to benefit. However, market conditions can change rapidly, and investors should be prepared for potential fluctuations.

    Key Insights

    Risk-Adjusted Performance

    JEPQ’s higher Martin ratio indicates better risk-adjusted performance, making it a more stable option for risk-averse investors.

    Income Potential

    QQQI’s significantly higher dividend yield makes it an attractive choice for income-focused investors, despite its higher volatility.

    Market Conditions

    The current favorable market conditions for technology stocks benefit both QQQI and JEPQ, but investors should remain vigilant about potential changes in the economic environment.

    Long-Term Considerations

    Investors should consider their long-term goals and risk tolerance when choosing between QQQI and JEPQ. While QQQI offers higher income potential, JEPQ provides more stability and a longer track record.


    In conclusion, the choice between QQQI and JEPQ depends on the investor’s priorities. QQQI offers a higher dividend yield, making it suitable for those seeking immediate income. However, its higher volatility and shorter track record may pose risks. On the other hand, JEPQ provides more stable, risk-adjusted returns and has a larger asset base, making it a safer option for risk-averse investors.

    Both ETFs are well-positioned to benefit from the strong performance of the technology sector. Investors should carefully consider their risk tolerance, income needs, and long-term goals when making their decision. By doing so, they can choose the ETF that best aligns with their investment strategy and financial objectives.

    Disclaimer: The information provided here and on kavout.com site is for general informational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Kavout does not recommend that any investment decision be made based on this information. You are solely responsible for your own investment decisions. Please conduct your own research and consult with qualified financial advisors before making any investment.

    Send us a Message

    7 + 15 =

    Contact us

    Contact us today to learn more about Kavout's products or services.