Subject: The Most Successful ETF Launch
JPMorgan Equity Premium Income ETF (JEPI) has $27B Assets under management 3 years after launch. JEPI buys some S&P 500 stocks with low volatility, and sells call options. The goal is 1.5% dividend yield plus 6.5% options premiums.

The outcome:
Higher Bear market returns: collect the premiums and hold the stocks.
Lower Bull market returns: collect the premiums and sell the stocks at the strike price.

This ETF has grown quickly. Some investors want less risk than the S&P 500. The usual advice is to mix in some bonds, but call options might be another way. Mixing in 40% bonds has a multiplier effect: both returns and volatility are decreased by about 40%. Using call options has an additive effect: bear market returns are increased by the fixed premium, and bull market returns are capped. (Some investors want more risk and take the other side of the trade: buying the call options.) JEPI had a good 2.5 year start:

Portfolio Analysis Results (Jan 2021 - Jun 2023)

  Portfolio    Initial Balance  Final Balance  CAGR   Stdev   Best Year  Worst Year  Max. Drawdown  Sharpe Ratio  Sortino Ratio  Market Correlation
60:40 SPY BND      $10,000         $10,838     3.27%  12.64%    16.50%     -16.15%      -20.16%         0.18          0.25              0.98
    JEPI           $10,000         $12,368     8.87%  12.27%    21.51%     -3.53%       -12.99%         0.62          1.03              0.89

https://www.portfoliovisualize...

Portfolio Analysis Results (Jan 1987 - Jun 2023)

  Portfolio    Initial Balance  Final Balance   CAGR   Stdev   Best Year  Worst Year  Max. Drawdown  Sharpe Ratio  Sortino Ratio  Market Correlation
60:40 SPY BND      $10,000        $210,471     8.71%   9.57%     29.74%     -20.19%      -30.78%         0.62          0.91              0.97
     SPY           $10,000        $387,543     10.54%  15.32%    37.45%     -37.02%      -50.97%         0.54          0.78              0.99

The Most Successful ETF Launch of All Time Raises Questions, Jun 27, 2023
"JPMorgan Equity Premium Income ETF JEPI has been a phenomenon since launching in May 2020. By our estimates, it gathered about $27 billion in net inflows in its first three years of existence, easily making it the most successful exchange-traded fund debut in history"
https://www.morningstar.com/al...

"JEPI is a conservative equity solution comprised of two fundamental building blocks: a defensive equity portfolio of U.S. large cap stocks and a disciplined options overlay." (One-month, out-of-the-money call options
https://am.jpmorgan.com/conten...