JEPQ Holders Trailed the Nasdaq-100 Over the Past Year While Chasing a Monthly Check

Investors in the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) underperformed the underlying Nasdaq-100 index over the trailing 12 months ending September 2026. While JEPQ delivered an adjusted total return of 21.21% including all monthly payouts, the Nasdaq-100 achieved a total return of 26.50%, generating a performance gap of over 5 percentage points. The underperformance highlights the structural trade-off inherent in covered-call strategies during sustained bull markets. JEPQ generates premium income by selling out-of-the-money call options via equity-linked notes against a basket of mega-cap tech stocks, including NVIDIA, Apple, Micron, Alphabet, Microsoft, and Amazon. When the index surges past option strike prices, the fund forfeits capital appreciation above those levels in exchange for option premiums. Despite trailing in total returns, JEPQ offered income stability and downside dampening, exhibiting a 0.92% daily standard deviation and a maximum drawdown of -5.88%, compared to 1.23% and -6.66% for direct index exposure. The fund remains popular with income-oriented investors seeking regular cash distributions over maximum capital growth.