JEPQ vs QQQI
JPMorgan's and NEOS's Nasdaq-100 covered-call income ETFs, head to head — yield, the tax difference, NAV, risk, and our independent scores.
Same Nasdaq-100 exposure, different machinery. QQQI (NEOS) pays more — roughly 13.8% vs 10.2% — and its Section 1256 index options earn 60/40 tax treatment, friendlier than JEPQ's ordinary-income ELN distributions. JEPQ (JPMorgan) is cheaper, far bigger, has a longer track record, and has actually grown its NAV; we score it slightly higher (3.9 vs 3.7).
Both rate WATCH and both carry High risk — this is the Nasdaq-100, so expect ~17% volatility and heavy tech concentration. The decision is the same shape as JEPI vs SPYI: in a taxable account QQQI's tax edge and bigger payout stand out; inside an IRA, JEPQ's lower cost, longer history, and stronger NAV trajectory win. Note QQQI's distribution is roughly 99% return of capital and the fund is young (2024), so its NAV story is still being written.
“Edge” marks the more favourable fund on that metric only — not an overall recommendation. Returns and rates are period-dependent; both funds may have launched at different times.
The differences that actually matter
1. Same index, different machinery
Both funds sell options against the Nasdaq-100 for monthly income, but the engines differ. JEPQ holds an actively managed large-cap portfolio and writes calls through equity-linked notes (ELNs). QQQI holds a Nasdaq-100 portfolio and runs a Nasdaq-100 index-option overlay (net-credit structure, with optional long calls to keep partial upside). As with their S&P 500 siblings, that structural choice drives the two biggest differences: how the income is taxed, and how the NAV behaves.
2. Income and tax — QQQI’s edge
QQQI pays noticeably more (~13.8% vs ~10.2%) and is taxed better. Its index options are Section 1256 contracts, so most of its distributions get the 60/40 blended rate rather than ordinary income — a real edge in a taxable account. JEPQ’s ELN income is ordinary income, taxed up to 37%, which erodes the after-tax yield for high earners.
The caveat is bigger here than for JEPQ: roughly 99% of QQQI’s recent payout was return of capital, so almost the entire 13.8% is your own capital cycling back, not earnings. Judge both on total return and NAV, not the distribution rate.
3. NAV and track record
This is where JEPQ pulls ahead. Since its 2022 launch it has returned about +17.1%, with roughly 27% of that from price appreciation — its NAV has grown, not just paid out. Neither fund currently carries our NAV-erosion flag, but QQQI only launched in January 2024, so it hasn’t been tested across a full cycle, and its ~99%-ROC distribution profile is exactly what erodes NAV over time. JEPQ simply has more, and better, history on the board.
4. Risk, cost, and scale
The two are close on risk — both High, both ~17% volatility, both tech-concentrated by virtue of the index. JEPQ is the cheaper and bigger fund: a 0.35% expense ratio versus QQQI’s 0.68%, and roughly $39B in assets versus ~$12B. QQQI counters with the higher payout, the tax advantage, and a slightly better recent Sharpe ratio.
Which one fits you?
Lean JEPQ if you hold in a tax-advantaged account (where QQQI’s tax edge evaporates), you want the lowest cost and the longest track record, and you value a fund whose NAV has actually grown.
Lean QQQI if you hold in a taxable account (the Section 1256 treatment is the headline reason to own it) and you want the larger monthly distribution — accepting a younger fund whose payout is almost entirely return of capital.
Either way: don’t read the distribution rate as your return, and if you only hold one in taxable space, make it the more tax-efficient QQQI while keeping JEPQ for the IRA.
JEPQ vs QQQI: FAQ
Is JEPQ or QQQI better?
Both score in the high-3s and we rate both WATCH. QQQI pays more (~13.8% vs ~10.2%) and is more tax-efficient via Section 1256, but it's younger and its distribution is ~99% return of capital. JEPQ is cheaper, much larger, has a longer track record, and has actually appreciated since inception — we score it slightly higher (3.9 vs 3.7). The better pick depends mainly on your account type and whether you weight income or track record.
Does QQQI pay a higher dividend than JEPQ?
Yes. As of mid-2026 QQQI distributed at roughly a 13.8% annualised rate versus about 10.2% for JEPQ, and both pay monthly. Around 99% of QQQI's recent distribution was return of capital, so the headline rate overstates what the fund actually earns.
Is QQQI more tax-efficient than JEPQ?
Generally yes, in a taxable account. QQQI writes Nasdaq-100 index options that qualify as Section 1256 contracts, taxed under the favourable 60/40 split. JEPQ's income comes through equity-linked notes that distribute as ordinary income (up to 37%). Inside a tax-advantaged account such as an IRA, the difference doesn't matter.
Is QQQI riskier than JEPQ?
They're similar — both rate High risk, both run around 17% volatility, and both are heavily concentrated in large-cap tech because they track the Nasdaq-100. QQQI is marginally more volatile but had a slightly better Sharpe ratio. The meaningful differences between them are tax treatment, cost, and track record, not risk level.
Which has the better track record?
JEPQ, by tenure. It launched in 2022, returned about +17.1% since inception, and roughly 27% of that came from share-price appreciation rather than distributions — its NAV has held up and grown. QQQI only launched in January 2024, so it has far less history and its NAV behaviour over a full cycle is still unproven.
Can I hold both JEPQ and QQQI?
You can, but they're largely redundant — both are Nasdaq-100 covered-call income funds, so holding both mostly diversifies manager, structure, and tax treatment rather than your market exposure. For genuine diversification, pair one with an S&P 500 income ETF instead.
Want the full picture on each fund — distribution sourcing, the 19a-1 read, NAV-erosion history, holdings and our running commentary?
Open the JEPQ report → Open the QQQI report →