Passive Income Investors Can Earn Almost $1,000 Per Year With A $10,000 Investment In This JP Morgan ETF

You may be familiar with the saying that "too much" of a good thing can be dangerous. This might be true about fine wine, but more is always better regarding passive income. That's why so many passive income investors value offerings with the potential for double-digit returns. If you fall into this category, you might like this exchange-traded fund (ETF) from JP Morgan that's paying a dividend of nearly 10%.

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Many investors see Nasdaq as the "younger, hipper" version of America's major stock exchanges. This perception is rooted heavily in the belief that Nasdaq offerings offer opportunities for share growth, mainly because they cater more heavily to tech stocks and startups. The explosive growth potential of tech stocks like Nvidia is exciting, but if there is a knock on the top Nasdaq shares, they don't necessarily pay high dividends.

According to the Slickcharts website and public filings, the NASDAQ-100, an index of the top 100 performing stocks on the Nasdaq exchange, is currently paying a dividend of only 0.08%. The JP Morgan Nasdaq Equity Premium Income ETF is designed to give investors the best of both worlds by combining Nasdaq growth potential with blue-chip dividend returns.

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This ETF achieves this through a unique strategy of trading stock options while holding shares in some of Nasdaq's best stocks. The "hold" portion of the JP Morgan Nasdaq Equity ETF's portfolio includes some of the NASDAQ-100's best stocks, including Amazon, Apple and Nvidia. It's also worth noting that this ETF prioritizes growth and performance with its "hold stocks."

This ETF increases its shares in NASDAQ-100 stocks that perform strongly in each quarter while also lowering its exposure to underperforming stocks. Many other competing index funds tend to match the NASDAQ-100's share allocation and then adjust on a yearly basis. That is not an unsound strategy, but it could lead to missed opportunities on overperforming stocks and prolonged exposure to underperforming stocks. 

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On the options side of the equation, the JP Morgan Nasdaq Equity ETF earns money by using JP Morgan's insight to write various "out-of-the-money" call options on NASDAQ-100 stocks. This strategy allows the ETF to generate significant income by selling its call options to buyers looking to take advantage of market volatility. That income flows to investors as dividends.

According to information provided by JP Morgan, the Nasdaq Equity ETF has paid a dividend of 9.9% over the last 12 months. That is nearly double the average rate of high-yield U.S. bonds (7%) and global REITs (3.90%). If that performance continues in 2025, a $10,000 investment in this ETF could yield $990 in passive income for the year. That is an impressive return by any stretch of the imagination.

When considering the risks of this offering, it's always important to remember that options trading can be as lucrative as it is risky. The returns on call options in this ETF make up a large portion of its dividend-earning potential. Although JP Morgan uses detailed analytics and modeling to plan its call options, a "hot" trading strategy can quickly go cold. Keep that in mind before taking the plunge.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

You Can Profit From Real Estate Without Being A Landlord

Real estate is a great way to diversify your portfolio and earn high returns, but it can also be a big hassle. Luckily, there are other ways to tap into the power of real estate without owning property. Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

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