ARK Invest Files Plans for Four Buffer ETFs Protecting ARKK Losses

Cathie Wood's Ark Investment Management is entering the growing buffered ETF market by filing for four new exchange-traded funds designed to limit losses while capping potential gains on its flagship Ark Innovation ETF (ARKK). These ARK Q1, Q2, Q3, and Q4 Defined Innovation ETFs will operate on rolling 12-month cycles and aim to protect investors from up to 50% of ARKK's declines, only sharing gains if ARKK rises more than about 5%. This move reflects a strategic shift toward downside protection amid market volatility driven by geopolitical risks and trade tensions, including those involving President Donald Trump's trade policies. Despite ARKK and the internet-focused ARKW posting strong gains over the past year, investor enthusiasm is waning, with ARKK facing its 19th month of net outflows. Ark joins other major firms like BlackRock and Allianz in this space, catering to investors seeking risk-hedged products that offer a trade-off between downside protection and upside potential. Analysts liken these buffered ETFs to a 'diet' version of Ark's funds, providing some downside relief while sacrificing a portion of the gains.