Why did I buy this high-yield Nasdaq ETF fist when it was sold on the market

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Why did I buy this high-yield Nasdaq ETF fist when it was sold on the market

When writing, Nasdaq Composite Materials The index is experiencing a fierce bear market, covering nearly 25% since the end of last year. Because people pay attention to Trump administration’s “reciprocal tariff” policy Will affect the global economy. Many economists and financial experts are increasingly worried that they could trigger a global trade war that could trigger a recession.

this Market fluctuations It can last for a while. That’s one reason Why I’ve been loading JPMorgan Nasdaq Stock Senior Income ETF (NASDAQ: JEPQ). this Exchange Traded Funds (ETFs) Enable investors to benefit from upward potential Nasdaq 100 Small volatility. One way to do this is to distribute income to investors every month. As the price of ETFs falls, I hope to generate more income And get higher returns from this position future.

this JPMorgan Nasdaq Stock Senior Income ETF Has a dual task. The fund is designed to provide investors with a monthly income stream. It also tries to Expose them The volatility is small, and it will reach the upside space of the Nasdaq-100.

The fund has a two-part strategy to achieve this:

Basic equity portfolio: The fund manager uses “Applied Data Science Methods for Basic Research” to build on the NASDAQ-100 portfolio. It has many of Inventory in this index, although it does not match the allocation of the index.
Discipline Option Coverage Strategy: Foundation Writing (Short selling) The currency is inappropriate (higher than the current price) Call Options On the NASDAQ-100 index. By writing options, the fund generates premium income (it gets the value of the option, called its premium). It distributes this income to investors every month.

The fund is intended to deliver Similar Benefits of NASDAQ-100 Indexing. ETFs outperformed the index in the fourth quarter of 2024. During this period, the higher performance is higher weight to Marvell TechnologyIt was a strong quarter due to the significant growth in its data center segment. The fund also benefits from lower weights Application materialsThis declined during this period due to concerns about its guidance for the upcoming quarter.

In this year’s Nasdaq game, the ETF also provided better relative performance.

^NDX data is by YCHARTS.

Another factor that leads to its higher relative total returns compared to NASDAQ-100 is the option premium income generated by the fund and allocated to investors. according to quantity It is the revenue collected from the write options on the index. It is worth noting that market volatility is one of the things that attribute prices to prices. As market volatility increases, option premiums rise. Therefore, the revenue generated by the fund should increase in the short term, which should support higher monthly allocation payments.

The fund has provided a profitable source of monthly income. As shown in the figure below, it produces much higher compared to other asset classes.

This chart shows the output of this ETF compared to other asset classes. — Image source: JPMorgan Asset Management.

As funds take advantage of increased volatility and generate more option income in the current environment, the already high yield may be more profitable. This income will help provide tangible returns to help farther offset the decline in ETF value during market sell-off. At the same time, even if volatility eventually fades (always), funds should still generate considerable monthly income, especially From I added to the lower level of the location.

The current bear market in Nasdaq is a great opportunity to load up the premium income ETF of JPMorgan Nasdaq Stock. The fund provides a less volatile way to invest in an index that provides the potential for high returns. It also pays for a considerable monthly income stream, and as other opportunities emerge, I reinvest my tangible returns and cash flows. If the Nasdaq continues to decline, I plan to continue buying stocks in ETFs to improve my income and future return potential, while the market finally recovers.

Before buying stocks in JPMorgan Nasdaq Stock Premium Income ETF, consider the following:

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Matt Dilallo has a position in the JPMORGAN NASDAQ Stock Senior Income ETF. Motley fool has the location and recommends materials. Motley Fool recommends Marvell technology. Motley Fool has a disclosure policy.

Nasdaq Bear Market: Why I Buy This Productive Nasdaq ETF Fist, Because the Market was originally published by Motley Fool