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QQQI vs JEPQ: who keeps more of a Nasdaq rally?

QQQI and JEPQ both own Nasdaq-100 stocks and sell calls on that index. They differ in three ways: who sells the calls, how close the calls sit to today's price, and how the payout is taxed. The rally month is where you feel it.

Comparison · 7-minute read · Updated 2026-10-28

The short answer

JEPQ is J.P. Morgan's Nasdaq Equity Premium Income ETF. It owns Nasdaq-100 stocks picked by a manager. Banks sell Nasdaq-100 calls for it, through notes, usually Out of the money, a bit above today's level.

QQQI is NEOS's Nasdaq-100 High Income ETF. It owns Nasdaq-100 stocks and sells calls on the Nasdaq-100 index itself. That puts its option gains under Section 1256, a US tax rule with a lower-taxed split.

Both cap the upside. Both take most of a drop. The open question is how much of an up month each one keeps. That depends on where the strike sits, and both funds can move their strikes month to month.

Neither fund is a recommendation to buy or sell. Designs are as of October 2026. Check the current fund pages on the NEOS and J.P. Morgan sites before you compare.

Side by side

How much upside each keeps

A Covered call fund sells away everything above the strike. So the strike is the whole story in an up month.

• A strike close to today's level collects more premium. It keeps very little of a rally.
• A strike further above collects less. It keeps the first part of a rally.

Some index-option funds also buy a call even further up. That lets part of a really big rally back in. It costs some of the premium. Whether a fund does this, and how often, is in its current fund documents.

A rally month, worked out (hypothetical)

This is a simplified model, not either fund's real strikes, payout or holdings. It's an illustration, not a trade idea. Every dollar of premium is paid out.

Two people each put $10,000 in.

• QQQI-like: sells calls 1% above the level, collecting $160.
• JEPQ-like: sells calls 3% above the level, collecting $120.

Each row starts fresh at $10,000.

In the big up month, the index made $800. The QQQI-like fund kept $260. The JEPQ-like fund kept $420. Both handed most of the rally to the call buyer.

In the flat month, the closer strike wins. In the down month, both lose almost the full fall. The extra premium saved $40 out of $1,000.

Flip the strikes and the winners flip. That's why you can't settle this from the name. You have to look at where each fund is selling right now.

The tax, on top (hypothetical)

Take the flat month, in a taxable US account, with made-up tax rates: 24% ordinary, 15% long-term.

• JEPQ-like: $120 of note income × 24% = $28.80 of tax. Kept: $91.20.
• QQQI-like: $160 of index-option gains. $96 × 15% + $64 × 24% = $14.40 + $15.36 = $29.76 of tax. Kept: $130.24.

The QQQI-like fund pays a little more tax in dollars, because it paid out more. But each dollar is taxed less: about 18.6 cents, against 24 cents. In an IRA, 401k, TFSA or RRSP, it does nothing. There, only the design, the fees and the Total return matter. The full rule is in Section 1256 and covered call ETFs.

Canadian readers: both are US-listed. In a TFSA, US withholding can take a slice of each payout; see US covered call ETFs in a TFSA.

How to compare them yourself

1. Open each fund's current holdings. Find how far above the index the calls sit.
2. Check what share of the stocks the calls cover. Less than all leaves more room to grow.
3. Compare total return, price plus payouts, against the plain Nasdaq-100, over the same years.
4. If the account is taxable, compare after tax.

Doing it yourself, you pick the strike every month. After a drop, you can sell further up or skip a month. That's the core of the wheel strategy. For how these two sit next to the other big Nasdaq fund, see QYLD vs JEPQ. For the full map of designs, see how covered call ETFs work.

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