Retirees: Here's Why HDV Makes More Sense Than JEPI for Your Income Portfolio

In 2022, the JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI) consistently yielded well over 10% and paid multiple monthly per-share distributions of $0.50 to $0.60. In June 2026, the distribution was around $0.39 per share, and the current yield is at 8.3%. That's what can happen when a yield is based on volatility rather than corporate performance, as the market begins to calm.

If you're in retirement, predictability is more important. If volatility spikes, the portfolio's value is likely to be affected. You want your income backed by high-quality dividend-paying companies that can deliver consistent returns over time.

That's why the iShares Core High Dividend ETF (NYSEMKT: HDV) is the better choice for retirement income.

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iShares Core High Dividend ETF

The iShares Core High Dividend exchange-traded fund (ETF) tracks the Morningstar Dividend Yield Focus Index, which selects from a universe of U.S. large-cap stocks that are screened for financial health using a pair of Morningstar measures. Its portfolio includes 75 high-yielding stocks weighted by total dividends paid.

The fund's top five holdings (based on portfolio weight) are currently:

1. ExxonMobil: 8.2%
2. Chevron: 6.3%
3. AbbVie: 5.9%
4. Johnson & Johnson: 5.8%
5. Philip Morris International: 4.5%

HDV has, not surprisingly, underperformed the S&P 500 over the past decade due to its limited exposure to megacap tech. But it's beating the index by five percentage points so far in 2026.

The two sectors that will drive performance going forward are consumer staples and energy, which combine for 45% of the fund's holdings. That makes the ETF potentially exposed to volatility in the energy sector. ExxonMobil and Chevron have yields of 2.8% and 3.8%, respectively, but the pair, which accounts for nearly 15% of the portfolio, could fluctuate depending on what happens in the Middle East.

JPMorgan Equity Premium Income ETF

The JPMorgan Equity Premium Income ETF is an actively managed fund holding more than 100 lower-volatility S&P 500 stocks. That is combined with a series of equity-linked notes (ELNs) that form a covered call strategy to generate monthly income. The income mostly comes from options premiums. The fund's top five holdings (based on portfolio weight) are currently:

1. Ross Stores: 1.8%
2. Apple: 1.7%
3. Howmet Aerospace: 1.7%
4. AbbVie: 1.7%
5. Nvidia: 1.7%

As we saw in 2022, JEPI's low-volatility tilt provides some downside protection but can lag badly in bull markets. Since the beginning of 2023, JEPI has returned just 34% compared to the Vanguard S&P 500 ETF's 103% cumulative return.

Because the yield is heavily dependent on S&P 500 volatility, the yield tends to rise when the market is rallying. That means investors can lose income even as fund performance lags. Many covered-call ETFs have this problem, so your opinion on the JPMorgan Equity Premium Income ETF should largely depend on where you believe the stock market is heading.

Overall, the iShares Core High Dividend ETF is the better choice for retirement investors. The current 2.9% yield has historically been much more stable. Plus, since it's an all-equity portfolio, you fully participate in market upside when stocks are rallying.

David Dierking has positions in Apple. The Motley Fool has positions in and recommends AbbVie, Apple, Chevron, Howmet Aerospace, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson and Philip Morris International. The Motley Fool has a disclosure policy.