How an ETF with an 11% yield shows a growing use case for active strategies

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The JPMorgan Premium Equity ETF is one of the most popular funds on the market, even though it is actively managed.

Rising yields and investors' hunt for income have created an opening for actively managed exchange-traded funds to grab a foothold, including one with an eye-popping monthly payout. The JPMorgan Premium Equity ETF has a 12-month rolling dividend yield over 11%, and its 30-day SEC yield was just under that mark as of the end of February. That has helped make it one of the most popular ETFs of the year, with over $4 billion in inflows so far, according to FactSet.

did in 2022. "The market environment has been such that investors are looking for income without duration. … shows one way that active funds can stand out from their passive counterparts, despite active stock pickers' poor historical performance versus the market. ETFs have traditionally and predominantly been a passive investing vehicle. The biggest funds in the market track indexes, like the S & P 500, and give investors market returns minus fees. But 2022 was a surprisingly good year for active managers , and active ETFs gained some share against their passive counterparts.

has monthly distributions and people can pull it up on their database of preference and see what those distributions have been is a really powerful thing," Lake said. He added that the fund was now three years old, giving it a longer track record for investors and financial advisors to trust. Of course, active strategies benefit fund managers too, in the form of higher fees.

 

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