JEPI: Good Hedge Vs Tech-Heavy S&P500 In Current Rates Environment
Portfolio Pulse from
JEPI is a defensive ETF compared to SPY due to its lower exposure to high-beta tech stocks and higher exposure to equity-linked notes. This makes JEPI favorable in a weak or sideways market, especially with the Fed's slower rate cut expectations impacting tech-heavy stocks.
December 22, 2024 | 8:30 am
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POSITIVE IMPACT
JEPI is positioned as a defensive ETF with lower exposure to tech stocks and higher exposure to equity-linked notes, making it favorable in the current rate environment.
JEPI's underexposure to high-beta tech stocks and overexposure to equity-linked notes make it a defensive choice in a weak or sideways market. The Fed's slower rate cut expectations in 2025 negatively impact tech stocks, enhancing JEPI's appeal.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
SPY, with its tech-heavy composition, may face challenges due to the Fed's slower rate cut expectations, which could lead to a correction in tech stocks.
SPY's high exposure to tech stocks makes it vulnerable to the Fed's slower rate cut expectations, which could impair long-duration tech growth stocks, leading to potential corrections.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 100