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Dear Fellow Investor,
One of the Best Ways to Protect Your Portfolio
With markets still volatile—and with investors trying to make sense of rate cuts, geopolitical tensions, sticky inflation, sector rotations, and earnings surprises—one thing is clear: portfolio protection matters now more than ever. And while there are many strategies investors can deploy, one of the most reliable is also one of the simplest.
Dividend-paying stocks.
These aren’t the most exciting names in the market. They don’t double overnight, rarely generate headlines, and usually don’t dominate social media feeds. But when things get rocky, dividend stocks consistently do what investors need most:
They provide stability, income, and long-term compounding—no matter what the market is doing.
Historically, dividends have accounted for approximately 30% to 40% of total stock market returns, depending on the timeframe. When volatility spikes, that steady stream of cash becomes even more valuable. And today, with uncertainty still weighing heavily on both institutions and retail investors, high-quality dividend strategies may be one of the smartest tools available for reducing risk while still capturing upside.
Fortunately, investors don’t need to hand-pick individual dividend stocks. Several powerful ETFs now combine dividend income with covered call strategies, enhanced premium harvesting, and rules-based approaches designed to strengthen yield and dampen volatility.
Here are four standout dividend-focused ETFs worth considering—especially if your goal is protection, consistency, and income.
ETF: Amplify CWP Enhanced Dividend Income ETF (SYM: DIVO)
One of the most respected names in the dividend ETF space is the Amplify CWP Enhanced Dividend Income ETF (SYM: DIVO). This fund is designed specifically for investors who want to pair the strength of blue-chip dividend stocks with the income-generating power of covered calls.
DIVO currently yields 1.66% and carries an expense ratio of 0.56%. But what makes it distinctive is its strategy. Instead of simply holding dividend-rich companies, DIVO uses a proprietary approach known as the Enhanced Dividend Income Portfolio (EDIP).
As Amplify explains, the EDIP strategy works by:
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Holding high-quality large-cap companies with long histories of dividend growth
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Writing short-term covered calls on select holdings
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Generating additional income streams through those option premiums
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Focusing on consistent annual income and cash flow
This blend of dividend strength plus option premium yield is powerful. It allows the fund to tap into stable companies from the S&P 500, the Dow 30, and the S&P 100—companies known for resilience, profitability, and reliable payouts—while enhancing total return potential.
In periods of volatility, covered calls can help soften the blow. When markets drift sideways or pull back, the premium income provides a cushion. When markets rise, dividend growers typically participate in the upside. For investors seeking a steady, defensive anchor in their portfolio, DIVO remains one of the strongest choices available.
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ETF: JPMorgan Nasdaq Equity Premium Income ETF (SYM: JEPQ)
If DIVO blends stability with income, the JPMorgan Nasdaq Equity Premium Income ETF (SYM: JEPQ) adds high-powered growth stocks to the mix—while still keeping risk in check.
JEPQ is designed around a simple but effective philosophy:
Harness the explosive power of Nasdaq growth stocks while generating meaningful monthly income through covered call premiums.
Currently yielding 9.74%, JEPQ focuses on U.S. large-cap growth stocks—many of which are foundational to the tech-driven economy. But instead of relying solely on price appreciation, the ETF sells options to generate monthly income, turning volatility into opportunity.
This strategy offers several advantages:
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High premiums when volatility spikes
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Consistent income distributions
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Exposure to tech and growth leaders without taking full downside risk
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The ability to monetize both choppy markets and sideways trading environments
JEPQ’s expense ratio comes in at 0.35%, and its appreciation has been strong. Investors who entered the fund for income have often seen the added bonus of capital gains, thanks to the Nasdaq’s resilience and the steady growth of its core holdings.
In a world where traditional income sources like bonds are still adjusting to shifting rates, JEPQ stands out as a hybrid solution: part growth engine, part income generator, part buffer against volatility.
ETF: JPMorgan Equity Premium Income ETF (SYM: JEPI)
One of the most popular ETFs in the income space is the JPMorgan Equity Premium Income ETF (SYM: JEPI)—and for good reason.
JEPI combines:
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A concentrated basket of high-quality blue-chip stocks
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A disciplined options-writing strategy
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Monthly income distributions
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Lower volatility than the broader market
The ETF currently yields around 7.24% and charges an expense ratio of 0.35%. It holds 122 stocks, including some of the strongest names in the S&P 500: Visa, Mastercard, Trane Technologies, Microsoft, Oracle, Southern Company, and Nvidia, among others.
JEPI attracts investors for two main reasons:
1. Reliability
JEPI’s covered call strategy allows it to generate income in almost any environment—up, down, or sideways. This makes it appealing for conservative investors, retirees, or anyone seeking consistent monthly cash flow.
2. Risk Management
Because covered calls cap upside but cushion downside, JEPI often exhibits lower volatility than the overall market. Its holdings are generally high-quality, profitable, and stable—giving it a defensive posture even in turbulent times.
For investors who want a dependable, lower-risk income generator in their portfolio, JEPI has become a go-to option.
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ETF: iShares Core High Dividend ETF (SYM: HDV)
For investors who prefer a more traditional dividend strategy without options overlays, the iShares Core High Dividend ETF (SYM: HDV) is a strong contender.
With a yield of 3.41% and a low expense ratio of 0.08%, HDV tracks an index composed of high dividend–paying U.S. equities. It focuses on companies with sustainable payout ratios, consistent histories of dividends, and strong financial fundamentals.
Some of its top holdings include Exxon Mobil, Chevron, and Johnson & Johnson—all major players with long-term cash generation and resilient business models.
HDV’s strengths include:
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Low fees, supporting long-term compounding
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Exposure to sectors that historically outperform in volatile markets
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A focus on companies with strong balance sheets
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A straightforward, reliable dividend strategy
Unlike covered call funds, HDV does not sacrifice upside potential. When markets rally, HDV participates fully while still providing the benefit of consistent dividends.
InvestorPlace Media
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