Passive Income Investors Can Earn Up To $1,000 A Year With A $10,000 Investment In This JP Morgan ETF.
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You may be familiar with the saying that “too much” of a good thing can be dangerous. This may be true of fine wine, but more is always better in terms of passive income. That’s why many investors value gifts that have the potential for double-digit returns. If you fall into this category, you may like this exchange-traded fund (ETF) from JP Morgan that is paying a dividend of up to 10 percent.
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Many investors see the Nasdaq as a “younger, hipper” version of America’s largest stock market. This view is rooted in the belief that Nasdaq offerings provide opportunities for growth in shares, especially because they are more relevant to tech stocks and startups. The explosive growth of tech giants like Nvidia is exciting, but if there’s a knock on Nasdaq shares, they shouldn’t be paying high dividends.
According to the Sliccharts website and public filings, the NASDAQ-100, an index of the top 100 stocks on the Nasdaq exchange, is paying a dividend of just 0.08%. The JP Morgan Nasdaq Equity Premium Income ETF is designed to offer investors the best of both worlds by combining Nasdaq growth potential with blue-chip dividend returns.
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This ETF accomplishes this through a unique strategy of trading stock options while holding shares in some of the Nasdaq’s best stocks. The “hold” portion of the JP Morgan Nasdaq Equity ETF’s portfolio includes some of the top NASDAQ-100’s stock markets, including Amazon, Apple and Nvidia. It is also important to note that this ETF focuses on growth by working with “hold stocks.”
This ETF increases its holdings in NASDAQ-100 stocks that perform strongly in each sector while also reducing its exposure to underperforming stocks. Many other competitive index funds tend to match the NASDAQ-100’s share allocation and then adjust annually. This is not a foolproof strategy, but it can lead to lost opportunities at overstocked stores and prolonged exposure to negatives.
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On the options side of the equation, the JP Morgan Nasdaq Equity ETF earns money by using JP Morgan’s expertise to underwrite various “out-of-the-money” call options on NASDAQ-100 stocks. This method allows the ETF to make more money by selling its call options to clients looking to take advantage of market volatility. That money flows to investors as dividends.
According to information provided by JP Morgan, the Nasdaq Equity ETF has returned 9.9% in the last 12 months. That’s double the average rate of high-yield US bonds (7%) and global REITs (3.90%). If this trend continues in 2025, a $10,000 investment in this ETF could generate $990 in annual income. That’s an impressive return by any stretch of the imagination.
When considering the risks of this offer, it is always important to remember that trading options can be as rewarding as they are risky. The returns on the call options in this ETF form a large part of its dividend-earning potential. Although JP Morgan uses deep analytics and modeling to plan its call options, a “hot” trading strategy can quickly cool down. Keep that in mind before you take the plunge.
Are you wondering if your money can take you to a $5,000,000 nest egg? Talk to a financial advisor today. SmartAsset’s free app matches you with up to three financial advisors serving your area, and you can interview your advisor matches for free. decide which one is best for you.
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