Cathie Wood's Ark Investment Management has filed proposals for four new exchange-traded funds that aim to cushion potential losses in its flagship ARK Innovation fund (ARKK.P).
These ETFs mark Ark's entry into the buffer ETF market, where funds use options to limit losses while capping gains. The strategy, already used by companies such as BlackRock (BLK.N), Allianz and Innovator, has gained popularity among investors seeking protection in volatile markets.
The proposed funds - ARK Q1 Defined Innovation ETF, ARK Q2 Defined Innovation ETF, ARK Q3 Defined Innovation ETF and ARK Q4 Defined Innovation ETF - will each run on a rolling 12-month schedule beginning in January, April, July and October, respectively, according to a filing with the U.S. Securities and Exchange Commission last week.
Each fund aims to limit a drop in the share price to 50% in the ARK Innovation ETF, while passing on gains only if the ETF rises more than about 5%.
This comes as U.S. President Donald Trump's tariff war has rattled markets and pushed up volatility, although his policies are expected to benefit the fund's holdings.
ARK's biggest holdings include EV-maker Tesla (TSLA.O), crypto exchange Coinbase (COIN.O) and trading platform Robinhood (HOOD.O), according to LSEG data.
The fund is up about 24% since the start of the year, compared with an about 6% rise in the S&P 500 index.
