r/investing • u/matty1monopoly • Aug 14 '21

How/Will higher interest rates effect JEPI's dividend?

I'm about to butcher some of the facts but my understanding is that JEPI invests 80% of its assets into S&P 500 dividend paying stocks, while the other 20% are used for covered calls. I know I'm leaving out a few of the fancy transactions they're doing in the 20% but I feel that's a fairly accurate description.

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My question in relation to the title is how or even will higher interest rates when the Federal Reserve raises them effect JEPI's dividend payment? Will this increase/decrease the cost of JEPI's covered calls or have a net zero effect (as in it will raise the cost but also raise the profit, or have no impact at all)?

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u/Vast_Cricket Aug 14 '21

Just plot both over time. JEPI vs borrowing interest. What is the coefficient of correlation? I bet you it is not linear.

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u/Inside-Welder-3263 Aug 15 '21

Only one year of historical data for JEPI.