What is the FEPI ETF’s Strategy?Īccording to RexShares, FEPI “combines big tech stock exposure and potential for steady income in a covered call ETF.” FEPI invests in an equal-weighted index of 15 tech stocks called the Solactive FANG Innovation Index, and it “sells call options against these big tech stocks, seeking to harness their volatility.”įEPI will pay a monthly dividend with no K-1. That being said, it could still be a good fit for investors who already own JEPI or similar ETFs and are looking to add more monthly income to their portfolios. ![]() I'm also watching to see what kind of monthly payouts it makes over time. With an experienced team of active managers, a reasonable expense ratio, a diversified portfolio, and a goal of paying a monthly dividend, PAPI looks like an attractive choice for income investors.I'm very intrigued by FEPI, and I am adding it to my watchlist, but I'm neutral on it for now based on its lack of diversification and its relatively high expense ratio. The average PAPI stock price target of $27.41 implies 10.3% upside potential. Turning to Wall Street, PAPI earns a Moderate Buy consensus rating based on 119 Buys, 53 Holds, and 10 Sell ratings assigned in the past three months. Is PAPI Stock a Buy, According to Analysts? Assuming it maintains this same expense ratio and returns 5% per year going forward, this same investor would pay $93 in fees over the course of three years, which is reasonable enough. PAPI’s 0.29% expense ratio means that an investor putting $10,000 into the fund will pay $29 in fees over the course of a year. JEPQ also charges 0.35%, and SPYI charges a much higher 0.69%. Many actively-managed ETFs have much higher expense ratios of 0.50%, 0.75%, or even higher, making PAPI’s 0.29% expense ratio something of a bargain.Ĭomparing PAPI to its peers with similar strategies, its expense ratio is even cheaper than that of the much larger JEPI, which charges a slightly higher 0.35%. While PAPI’s expense ratio of 0.29% isn’t exactly cheap compared to the broad universe of ETFs, it has to be said that it’s actually a very reasonable fee for an actively-managed ETF. Once it gets going, it seems reasonable that it will generate a dividend yield that is somewhere in line with its peers like JEPI, the JPMorgan Nasdaq Equity Premium Income ETF ( NASDAQ:JEPQ) (a tech-centric counterpart to JEPI) and the NEOS S&P 500 High Income ETF ( BATS:SPYI) ( another new JEPI competitor), which feature dividend yields of 9.1%, 10.8% and 12.1%, respectively. That said, its stated intention is to pay a monthly dividend. Waiting for PAPI's Dividendīecause it just launched last month, PAPI has not yet paid out a distribution, so we don’t yet know what its dividend yield will be. The price-to-earnings ratio of its portfolio is 14.2 versus the S&P 500's ( SPX) price-to-earnings ratio of 20.4. ![]() These companies may not be the most exciting from a growth perspective, but they all feature above-average dividend yields and have paid these dividends for a long time.Īnother attractive aspect of PAPI is that these holdings are inexpensively valued. ![]() ![]() It owns 181 stocks, and its top 10 holdings account for just 7.9% of holdings, so there is no concentration risk here. Below, you’ll find an overview of PAPI’s top 10 holdings using TipRanks’ holdings tool.Īs you can see, PAPI owns a host of companies that are well-known for their high dividend yields and longstanding track records of paying dividends, like Verizon ( NYSE:VZ), AT&T ( NYSE:T), Raytheon ( NYSE:RTX), and Coca-Cola ( NYSE:KO). Diversified Portfolio of Dividend Stalwarts Between them, PAPI’s six portfolio managers have 125 years of industry experience. However, it should also be pointed out that these ETFs most likely leave some returns on the table because selling covered calls will naturally cap some of the upside from their holdings in terms of price appreciation.Īs long as investors understand this dynamic and are okay with potentially forgoing some price appreciation in exchange for a steady stream of monthly income, then an ETF like PAPI is a worthy part of a balanced portfolio.Īn additional note is that PAPI is an actively managed fund, and it is run by a team of six experienced portfolio managers. This is a great strategy for investors looking for monthly income. It will pay a monthly distribution, and it does this through a combination of owning a large number of dividend stocks and selling covered calls in an attempt to generate additional income. Like its peers, PAPI appeals to income investors.
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