When The Stock Market Fell JEPI ETF Outperformed

A fund that actually holds its ground when stocks are falling is what real portfolio diversification looks like.

When the S&P 500 tumbled 9.4% in a 2020 selloff, that familiar knot in the stomach was a reminder that most stock funds fall when the market falls. But one equity fund, the JPMorgan Equity Premium Income ETF (JEPI), returned -3.6% in that same period, cushioning the drop significantly. This is an equity fund designed to stay in the stock market but with a steadier hand. It seeks to capture most of the S&P 500’s performance while reducing risk through lower volatility.

How Has It Behaved When Stocks Dropped?

The record shows a pattern of resilience. Across the last 5 S&P 500 drawdowns, JEPI held up in 3 of them. The fund’s performance during these periods of stress is where its defensive character becomes clear. In one selloff, the S&P 500 fell 8.4% while JEPI returned -3.4%. In another, the market dropped 8.9% and the fund returned -3.9%. This steadiness extends beyond major drawdowns. Day to day, the fund tends to ride calmer seas. Over the past year, JEPI has run at about 8% annualized volatility, a noticeable contrast to the 13% for the S&P 500.

What Kind Of Defense Is This?

This is a way to stay invested in stocks, defensively. The fund doesn’t run for the exits to a different asset class like bonds or cash when the market gets choppy. Instead, it remains an equity fund, holding 133 positions in companies like Johnson & Johnson, Apple, and Amazon.com. By aiming for lower volatility, it seeks to soften the blows during market declines while still participating in the market’s potential gains. It’s a tool for investors who want to remain in the market but are looking for a less turbulent experience.

Does It Defend Every Single Time?

No defender is perfect, and this one is no exception. A defensive track record is history, not a guarantee. There have been selloffs where the fund fell more than half as much as the market. For instance, in a 2025 selloff, the S&P 500 fell 18.8% and this fund returned about -13.3%. In another difficult period for the market in 2022, the S&P 500 fell 25% while JEPI returned -12.4%. Past defense, however consistent, does not promise future defense.

So Where Does This Fit In A Portfolio?

With stocks under pressure, the practical question for any investor is a simple one: do you own anything that actually cushions a fall? Looking at a fund like this isn’t about predicting the market’s next move. It’s about asset allocation. It raises the question of whether your portfolio has room for a holding that is designed to stay in the market but with the potential for a smoother ride, especially when the waters get rough.

Could Something Cushion The Drop More?

Knowing JEPI held up is a start, but it raises the sharper question: is it the best at this, or does another fund cushion a selloff even more for less of a trade-off? That is worth checking before you lean on any single defender.

Our Drawdown Defenders screen answers it directly. It ranks the funds that held up across the recent S&P 500 selloffs by how far they beat the S&P during those drops, how many of the selloffs each one defended, and what they have actually returned since, with annualized return, volatility, Sharpe, and Sortino all measured over the same stretch. It leans toward the defenders that kept their upside too, not just the funds that sat out the drop, so you can see where JEPI sits and which funds protected without giving up as much. For the wider picture on valuation and long-run performance, the ETF Valuation and Performance Scorecard ranks the major funds side by side.

What Does Pure Defense Cost You?

There is a catch worth saying plainly. A fund that barely moves when stocks fall usually barely moves when they rally either. Lean too hard on defenders and you trade away the upside that actually grows a portfolio over time, swapping one regret for another. The aim is not maximum defense, it is the right balance between protecting the downside and still owning the recovery.

That balance is the idea behind our High Quality (HQ) Portfolio: a rules-based, multi-factor mix built to participate in the upside while screening for the quality and resilience that softens the falls, re-balanced on a schedule so no single shock, and no single defensive bet, decides the outcome. It has a record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.