JEPQ vs. YMAX -- Blob vs. Ant
How does JP Morgan's $21.02 billion blob JEPQ stack up against YieldMax's $643.81 million dollar fire ant YMAX?
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So one of the subscribers asked me about JEPQ. So here you go.
So JP Morgan has accumulated $21.02 billion in JEPQ on which they get a 0.35% management fee. That pays them (0.0035 * 21,020,000,000=) $73,570,000.00 a year in fees. No, not joking.
So JEPQ opened its doors on May 6, 2022. At an opening price of $49.21.
So with today's price of $56.85, that's a $7.64 capital gain or a... (7.64/49.21 =) 15.53% capital gain.
Divide that by the number of months (31.82) and you get... 0.49% per month in capital gains.
Total dividends for the time period were: $13.8406 (source https://www.nasdaq.com/market-activity/etf/jepq/dividend-history)
So $13.8406 in total dividends divided by $49.21 (starting price) gives you at total yield of 28.13%... except, you need to divide that by the total number of months, which is again 31.82, or a monthly yield of 0.88% per month. Which is pretty good.
Which gives you a grand total (again, if you'd bought your shares way back in May 2022) an overall return (cap gains + yield) of… 1.37% per month, more or less (see second to last row of table).
But unfortunately, we can’t go back two years in time, so the real picture for JEPQ is more like this—which is JEPQ's performance over the past year (since 1/1/2024).
Where you've got your initial price (1/1/2024), current price (12/30/2024), high, and low prices, and your dividend total.
And following that are the various yields if you'd bought JEPQ today (current price), or at the high, low, or way back on Jan 1, 2024 (initial price).
This is way more realistic because it gives you a feel for what's actually happening right now -- or at least in the not-to-far-distant past (the preceding year).
Which means actual yield is somewhere in the range between 0.77% per month, and 0.91% per month, depending on where you bought JEPQ.
Total yield since the beginning of the year is in yellow — 10.85% — which is pretty good for a huge “income” fund.
Add in the cap gains since Jan 1, 2024 (14.69%) and you've got a total of 25.54% for the year or about 2.13% per month (cap gains + yield). Which is pretty good actually and outperformed JEPQ’s monthly historical average of 1.37%
We’ve already been through this part in another post (SCHD) as well as in this one (VOO) and this one (JEPI) but let's compare JEPQ here to YMAX (a YieldMax stock) over the same period.
Now YMAX is a highly diversified ETF that holds 28 other YieldMax stocks. See:
So it’s not as good as some of YieldMax’s best stuff, but also not as bad as its worst. To see more check out the current full YieldMax review.
So YieldMax has it's own problems. But when you compare the two, YMAX beats JEPQ’s yield by a mile (actually by 3.4X), even though YMAX takes a hit on capital gains.
YMAX also just started this year (1/19/2024) so has a slightly shorter performance history (11.33 months).
So same deal as the table above: initial (1/19/2024) price, current price (12/29/2024) and the high and low.
Then the number of months, followed by yields depending where you bought it.
Total yield over the time period (yellow) and average yield per month (blue).
So YMAX's yield averages between 3.01%/month and 3.89%/month.
But the overall picture is actually in the final line of both tables -- the overall Gain/Loss per month which includes BOTH yield + capital gain.
Which means that JEPQ is a more balanced with both positive cap gains (14.69%) and fairly good yield (10.85%) so with JEPQ basically “you have your cake (yields) and eat it too (cap gains)” with a 25.54% cap gain + yield over the past year.
YMAX stores (and distributes) its value primarily in the distributions (37.23%) but takes a hit on capital gains (-14.02%) resulting in an overall return (cap gains + yield) of 23.22%—just slightly less than JEPQ.
Which brings us back around to the perpetual question of the tradeoff between high yields and stock price.
YMAX goes all in for dividends at the expense of the stock price. JEPQ seems to achieve a good balance with a 10%+ yield and a sorta-kinda-ok capital gains. Compare JEPQ here to VOO’s 26.05% in capital gains and minimal yield, and SCHD’s 9.59% yield and smaller capital gain 7.47% — to get a better idea of how other products compare. See both articles for details.
As I mentioned in the other posts, I think the answer is that basically there is no "free" money anywhere. The money has to come from somewhere, so you really do end up kind of picking one or the other.
As mentioned above, it does seem like JEPQ finds a good balance between the two.
JEPQ is better here (2.13%/month) than YMAX (2.05%/month) over the past year, but I think with all of this stuff, you have to look at cap gains AND yields together in order to figure out what's actually going on.
If you rolled the calendar back a year, JEPQ looked like this (1/1/2023 through 12/31/2023) where “current price” is the price from 12/31/2023 and “initial price” is from 1/1/2023:
Meaning JEPQ— would have been even better here.
Though it should be noted that YMAX didn’t have quite a full year so probably would have clocked a slightly higher divided—a couple of weeks worth, anyway.
So what conclusion can you draw here? JEPQ edges out YMAX over the past year by about 0.08% per month. Which means JEPQ and YMAX see pretty much eye to eye—though JEPQ would have been the clear winner in 2023.
Still… once again YMAX more or less holds its own against a Mega fund.
I hope you enjoyed this (especially another classic “AI gone wrong” picture at the top. Those always get me laughing.
That's what we do here at Dividend Farmer pretty much exclusively — have a lot of fun with data. We hope you will join us.
Data-driven answers. No BS.
