Sorry JEPI, GPIX Is My New Covered Call ETF of Choice

The world of income investing is evolving fast. Over the past few years, covered-call ETFs have exploded in popularity, especially among investors seeking higher yields without surrendering equity exposure entirely. For many, JEPI (JPMorgan Equity Premium Income ETF) was the poster child of this space. But recent developments suggest it’s time to consider a newer contender: GPIX (Goldman Sachs S&P 500 Premium Income ETF).

In this post, I’ll walk through how covered-call ETFs work, the pros and cons, why JEPI has been so popular, how GPIX differentiates itself (and in many ways improves on known weaknesses), and whether GPIX is a better fit—depending on your goals.

Covered-Call ETFs: A Quick Primer

Before diving into a head-to-head, let’s ground readers in what these vehicles are and why they’ve gained traction.

What is a covered call strategy?
At its core, a covered-call strategy involves owning a stock (or portfolio of stocks) and selling (writing) a call option on that holding. In exchange for giving someone else the right to buy the stock at a predetermined strike price, you collect a premium. That premium becomes income—so long as the stock doesn’t blow past the strike and force a sale. You accept some upside limitation in exchange for current income.
Why embed this in an ETF?
An ETF wrapper lets asset managers systematically apply this strategy across broad portfolios—adding the premium income on top of dividend yields from equities. The aim: generate higher yield than a plain index ETF while dampening volatility during sideways or modest markets.
Trade-offs matter.
- Upside cap: If the underlying stocks surge, part or all of that upside is given away to option holders.
- Downside exposure: The premium income gives some cushion, but you still absorb losses of the underlying stocks if they fall hard.
- Volatility and option pricing environment: In volatile markets, premiums increase (good). In calm markets, income shrinks.
- Execution and discipline: The timing, strike selection, and dynamic management of the option overlay matter greatly.
- Tax treatment & fees: Option premiums often generate ordinary income (not favorable capital gains rates) and active management comes with higher costs.

Because of these trade-offs, covered call ETFs tend to outperform in flat to modestly bullish or moderately volatile markets—but may underperform in aggressive bull markets. (Yes, this is well documented in the sector commentary.) etf.com+2CAIA+2

Why JEPI Became the Go-To Choice

When JEPI launched (May 2020), it quickly grew to become one of the largest active ETFs—and the go-to among covered call income funds. Seeking Alpha+2JPMorgan Asset Management+2 Its appeal rested on a few strengths:

Strong yield profile. JEPI has generally offered attractive monthly distributions (in the 7–9% range depending on market conditions) by combining dividends with option premiums. Morningstar+5Seeking Alpha+5Morningstar+5
Defensive tilt and lower volatility via equity selection. JEPI doesn’t only rely on the option overlay for defense; the equity portfolio is somewhat conservative, with an eye toward quality names and lower-vol stocks. Morningstar+2JPMorgan Asset Management+2
Weekly option writing discipline. JEPI’s process includes writing options on a weekly basis to better adapt to changing volatility and market conditions. JPMorgan Asset Management+2Seeking Alpha+2
Scale and track record. Because JEPI amassed large assets under management and attracted attention, it enjoys liquidity, name recognition, and institutional support. JPMorgan Asset Management+3Seeking Alpha+3Morningstar+3

But with widespread use also come drawbacks—and those are the gaps GPIX is trying to exploit.

Enter GPIX: What Makes It Different (and Attractive)

GPIX is newer, but it’s positioning itself as a more flexible, dynamic, and possibly superior covered call vehicle—especially for investors who wish to balance yield with upside potential. Goldman Sachs launched it under their “Core Premium Income” suite. Goldman Sachs Asset Management+3Goldman Sachs Asset Management+3StockAnalysis+3 Here’s how GPIX stands out:

1. Dynamic Options Strategy with Variable Coverage

One of the key claims for GPIX is that it uses a variable or dynamic application of covered call writing. Rather than rigidly covering a fixed portion of its assets, GPIX adjusts the notional exposure of call writing (sometimes low, sometimes high) depending on market conditions. Seeking Alpha+4Goldman Sachs Asset Management+4Option Samurai+4

This can allow it to participate more in upside when it believes the environment is favorable, and pull back when it expects more volatility or downside pressure.

2. Lower Fee & Expense Efficiency

The Goldmans brochure notes that GPIX has a gross expense of 0.35% and a net expense of 0.29% (thanks to fee waivers) on an actively managed strategy. Goldman Sachs Asset Management That compares favorably to many active covered call funds—and helps reduce drag on returns.

3. S&P 500 Core Exposure — Broad Diversification

GPIX anchors itself in S&P 500 exposure while layering options. That gives it broad diversification, which may make it more appealing from a core equity+income bucket than niche or sector-limited covered call strategies. Goldman Sachs Asset Management+4Goldman Sachs Asset Management+4Goldman Sachs Asset Management+4

4. Potentially Better Upside Capture / Reduced NAV Erosion

Several recent commentators have pointed out that GPIX may better mitigate the “NAV erosion” issue that hits many covered call funds. Because some peer funds sell calls too aggressively or fixed ratios, they can slowly erode their net asset value in long bull trends. GPIX’s variable overlay aims to reduce that drag. StockAnalysis+4StockAnalysis+4Seeking Alpha+4

In fact, some analysis suggests that in 2024, GPIX outperformed JEPI in total return metrics. StockAnalysis

5. Yield + Total Return Combination Approach

GPIX is marketed as striving to deliver income plus appreciation—not just yield. While covered call ETFs often lean heavily toward income-first (accepting more drag on capital gains), GPIX seems to aim for a blend. The flexibility in its overlay helps in that regard. StockAnalysis+2Goldman Sachs Asset Management+2

Why I’m Switching (My Case for GPIX > JEPI)

Here’s the heart of my argument: GPIX offers a more balanced, adaptive, and potentially growth-friendlier approach to covered call income investing compared to JEPI, while preserving many of the yield advantages.

Let me break down the reasons:

A. Less Forgone Upside in Bull Markets

One of the biggest friction points with JEPI (and many covered call ETFs) is the drag in strong bull markets. Because you’re constantly giving away upside via the sold calls, even a good bull run ends up muted for covered call funds. JEPI is no exception. Morningstar+4Seeking Alpha+4Seeking Alpha+4

Thanks to its dynamic overlay, GPIX has a better chance of dialing back call exposure when momentum is strong, potentially allowing more participation in upside. The fund’s flexibility is a deliberate counter to overly mechanical strategies. Seeking Alpha+2Seeking Alpha+2

Over time, that might compound into significant alpha over more rigid covered call structures.

B. Better Mitigation of NAV Erosion

Some covered call funds suffer from gradual NAV erosion—essentially, the yield they generate doesn’t fully offset the drag from being constantly capped. This is especially acute in funds that write calls over a large fraction of holdings, irrespective of market regime.

Because GPIX adjusts writing intensity, it may reduce that wear and tear. Analysts have flagged GPIX’s ability to “minimize NAV erosion” as a differentiator versus JEPI. StockAnalysis+1

C. Yield Without Paying an Extreme Premium

JEPI is well understood and beloved, which means it commands a kind of “premium” in flows, assets, and attention. That can lead to valuation compression or over-saturation in option markets (i.e. premiums get bid down). The more inflows, the more capital chasing similar strategies—a classic problem of crowding.

GPIX is newer and (at least relative to JEPI) less crowded. Its lower fee structure helps too. If it can capture robust yield while preserving upside flexibility, the risk-adjusted returns could prove superior over a full market cycle.

D. Similar Defensive Features, With Option Flexibility

JEPI’s downside resilience comes both from its option overlay and its equity selection. GPIX doesn’t abandon that: it still holds core equities and layers options. But it adds a tactical flexibility that JEPI doesn’t emphasize.

In markets where volatility pops or drawdowns begin, a dynamic fund can ease out of aggressive call writing and preserve capital better than a rigid fund.

E. Better Alignment with a Long-Term Core Equity + Income Bucket

If I view my investment goals through the lens of “core equity exposure + consistent income,” GPIX seems better suited. JEPI is excellent for income and dampened volatility, but its rigidity can limit its usefulness as a foundational variant of equity exposure. GPIX’s adaptive approach seems more naturally suited to coexisting with vanilla index funds, rather than replacing them entirely.

Risks & Counterarguments: Why JEPI Still Has Strong Defenses

Of course, I’m not ignoring the counterpoints. JEPI wasn’t built out of thin air—it has strong rationales and defenders. Here are the critiques to my thesis.

Track record, size, and seasoning.
JEPI has a longer track record, huge AUM, wide adoption, and extensive third-party analysis. That gives confidence in liquidity, execution consistency, and robustness across market conditions. GPIX is newer—uncertain how it will perform under extreme stress.
Option execution discipline.
The success of a covered call fund depends more on how it's run than the idea itself. JEPI’s systematic weekly writing may bring discipline that helps avoid emotional or tactical missteps. GPIX’s flexibility is a two-edged sword—if misused, it could lead to poorly timed overlay adjustments.
Volatility environments.
In extremely volatile or trendless markets, the advantage of fixed, regular call writing is that it continuously harvests premium. GPIX, in trying to scale back during volatile times, might miss out on high premiums. In other words, sometimes you want maximum premium exposure rather than playing defense.
Fee waiver expiration and net cost.
The 0.29% net expense for GPIX is supported by fee waivers. If those waivers expire, costs could rise, hurting returns. Even slight differences in net cost over time matter in yield-driven strategies.
Crowded strategy critiques.
Covered call ETFs in general (JEPI included) face skepticism from hedge strategists who caution that too much capital chasing option selling compresses premiums and changes market dynamics. One hedge fund manager, Benn Eifert, recently warned that “systematically, blindly selling options is a BAD IDEA” and that crowded option strategies may underperform owning equities outright. etf.com

If the broader covered call ETF universe becomes overcapitalized, returns for all may suffer—including GPIX.
Tax considerations & yield source stability.
Option premium income often gets taxed as ordinary income. Also, premiums can fluctuate widely. If GPIX generates yield mainly from option premium in some environments, those yields may be less stable than they appear.

Given all that, JEPI’s edge is not trivial.

Performance Comparison—What the Data Suggests So Far

While GPIX is new and still lacks a long history, early comparative evidence and commentary are illuminating.

In 2024, some sources claim that GPIX outpaced JEPI in total return metrics. StockAnalysis
Analysts highlight GPIX’s capability to capture more upside in certain environments and manage downside better. Seeking Alpha+2StockAnalysis+2
JEPI’s underperformance relative to peers is becoming a recurring theme: some commentators have downgraded JEPI or challenged its upside capture limitations. Seeking Alpha+2etf.com+2
One Seeking Alpha piece explicitly argues "evidence is mounting that better covered call funds exist" beyond JEPI. Seeking Alpha

Still, it’s crucial to recognize that GPIX’s track record is short, and extreme downturns or market corrections are yet to fully test its mettle.

How to Decide: When GPIX Makes Sense for You (vs JEPI or Others)

No one fund is perfect for everyone. The choice between JEPI or GPIX (or other covered call funds) should hinge on your objectives, market outlook, and tolerance for trade-offs. Here’s a decision guide:

Your Priority	Lean JEPI	Lean GPIX
Maximum defensiveness & reliability in tough markets	✅ JEPI’s steady weekly overlay, conservative equity tilt	GPIX may misstep if overlay pulled too early
Better upside participation in non-crazy bull markets	GPIX’s dynamic overlay gives it an edge	JEPI’s fixed overlay is more draggy
Lower cost (net)	JEPI is competitive, but premium status may limit room for fee cuts	GPIX’s 0.29% net gives it initial cost advantage
Diversified core equity + income role	GPIX fits more naturally in a core allocation	JEPI works, but is more of an “income-first” play
Track record and institutional comfort	JEPI holds the advantage in maturity and AUM	GPIX is newer, but promising
Tolerance for tax variability & execution risk	JEPI has known execution patterns	GPIX’s flexibility introduces tactical risk

If your outlook is for relatively sideways to modest appreciation markets (rather than runaway bull rallies), GPIX may give you a more favorable risk/reward. If you expect deep volatility or a defensive tilt, JEPI’s disciplined consistency might maintain its edge.

Tips & Caveats for Investors Moderating Between GPIX & JEPI

Start with a small allocation.
Rather than swapping your entire covered call bucket, consider a partial stake in GPIX to test how it behaves in different market regimes.
Monitor overlay metrics.
Check how aggressively GPIX is writing calls vs. JEPI. If GPIX becomes overly aggressive, you’ll know quickly when it’s leaving too much on the table.
Watch fee waiver updates.
Because GPIX is subsidizing some of its net expense via waivers, keep an eye on updates—expiration or changes could shift the calculus.
Check yield sustainability.
High yields are seductive, but dig into what portion comes from option premiums vs. dividends, and how variable the distributions have been historically (or pro forma).
Consider tax placement.
Because option income tends to be taxed as ordinary income, GPIX or JEPI may be better suited to tax-advantaged accounts (IRAs, etc.).
Don’t forget core equity exposure.
Covered call ETFs are often best used as complements to straight equity ETFs, not total replacements. Balance your allocation to maintain growth exposure.
Expect periods of underperformance.
Any yield-oriented strategy will lag in strong bull markets. Be mentally prepared for drawdowns and periods where capital appreciation trails pure index funds.

Conclusion: Why, for Me, GPIX Is the New Cover Call ETF of Choice

Over time, the best investment products are those that adapt to market regimes rather than being bound by rigid rules. GPIX’s dynamic overlay gives it potential to flex with volatility, capture upside when possible, and dial back in tougher conditions. For those who want income plus better participation in equity growth, it offers a compelling balance.

JEPI remains a strong, proven, mostly reliable choice. It merits respect and remains in my periphery. But if I had to pivot today, GPIX is where I’d commit new capital in the covered call ETF sub-category. The trade-offs favor it for my moderate-to-long time horizon, mixed income/growth goals, and belief that markets will neither crash nor skyrocket in a straight line for the next decade.