The income challenge is changing

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With interest rates rising around the globe, new avenues are opening up for income-hungry investors. But the income challenge is changing rather than disappearing, so it makes sense to explore the full global opportunity set in search of yield.

Although the days of zero or near-zero interest rates are now behind us, inflation at multi-decade highs means income from bank savings and government bonds is still negative in real terms. Rising rates and the uncertain economic and geopolitical backdrop are also contributing to volatility in many markets. Investing across asset classes can help investors to build a more resilient income stream.

Dividend-paying equities may play a useful role in portfolios in rising-rate environments, complementing other income solutions. Over the long term, companies can pass rising energy costs and other input costs on to their customers in the form of higher prices, protecting their revenue and earnings streams from inflation.

In addition, dividends account for a significant share of total equity returns in volatile market environments – potentially providing a useful portfolio cushion when share prices are falling. For investors who can take on additional risk, equities could therefore be a useful part of an income portfolio.

The actively managed JPMorgan Equity Premium Income ETF (JEPI)1 pursues opportunities for consistent monthly income and appreciation, with lower volatility than the U.S. stock market.

JEPI seeks to pay out all the income the portfolio makes on a monthly basis, net of fees. Income is derived from both dividend and options premium – an innovative approach that aims to produce a consistent monthly income stream, although this is not guaranteed.

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1 JPMorgan Equity Premium Income (JEPI) is the marketing name of the JPMorgan Equity Premium Income Active ETF (Managed Fund).

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This information is generic in nature and does not take into account any specific investors’ objectives and should not be treated as offer, research or investment advice. Investors should seek financial advice. Past performance or distributions is not a guide for current or future results. The Australian registered JPMorgan Equity Premium Income Active ETF (Managed Fund) is a locally managed fund and it’s performance will differ from the underlying fund due to the impact of fees, taxes, currency fluctuation and other factors applicable to the Australian fund which are set out in its Product Disclosure Statement and Target Market Determination (available on https://am.jpmorgan.com/au). Investors should review these to understand the various risks associated with investing in the Fund and in making any investment decision. Risk management does not imply elimination of risks. Provided to illustrate the investment process. Dividend or returns are not guaranteed. Please refer to offering documents for details on distribution policy. ETFs have fees that reduce their performance, indexes do not. Investors cannot directly invest in an index. The Fund seeks to achieve its stated objectives, there is no guarantee they will be met. Dividends or returns are not guaranteed. Returns assume that an investor purchased units at Net Asset Value and does not reflect the transaction costs imposed on the creation and redemption of units, brokerage or the bid ask spread where applicable that investors may pay to buy and sell units on the Australian Securities Exchange. Information is considered correct at the time of issue but no liability for errors or omissions will be accepted by JPMorgan Asset Management (Australia) Limited or its affiliates. Issued by JPMorgan Asset Management (Australia) Limited (ABN 55143832080) (AFSL 376919), which is regulated by the Australian Securities and Investments Commission. This is generic information, not to be construed as offer or investment advice Returns or dividends are not guaranteed. Investors should refer to the Fund’s Product Disclosure Statement and Target Market Determination (available on https://am.jpmorgan.com/au) to consider whether the Fund is appropriate for them.

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