Cathie Woods Ark Launches Buffer ETFs to Mitigate Losses and Limit Gains

Cathie Woods' Ark Investment Management is launching four new ETFs that aim to protect investors from moderate losses while still providing participation in market gains. The ETFs will have a sliding scale that will cushion losses up to 50% and limit gains to 5%. The funds will have a 12-month rolling start date, beginning in January, April, July, and October. Ark's new ETFs are designed to be less volatile and appeal to investors who are willing to sacrifice some returns for a smoother ride.

Cathie Wood’s Ark Investment Management has filed proposals for four new exchange-traded funds (ETFs) designed to cushion potential losses in its flagship ARK Innovation ETF. These ETFs mark Ark’s entry into the buffer ETF market, where funds use options to limit losses while capping gains [1, 2, 3].

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 [1, 2, 3]. 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% [1, 2, 3].

This move comes as the 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 [1, 2, 3]. Ark’s biggest holdings include EV-maker Tesla, crypto exchange Coinbase, and trading platform Robinhood [1, 2, 3]. The fund is up about 24% since the start of the year, compared with an about 6% rise in the S&P 500 index [1, 2, 3].

ARK's new ETFs are designed to be less volatile and appeal to investors who are willing to sacrifice some returns for a smoother ride. The sliding scale of these funds will provide protection against moderate losses, potentially attracting risk-averse investors seeking stability in volatile markets [1, 2, 3].

References:
[1] https://kfgo.com/2025/07/07/cathie-woods-ark-files-for-new-etfs-to-limit-losses-in-flagship-fund/
[2] https://www.investing.com/news/stock-market-news/cathie-woods-ark-files-for-new-etfs-to-limit-losses-in-flagship-fund-4125564
[3] https://www.newsbreak.com/reuters-555486/4094020749161-cathie-wood-s-ark-files-for-new-etfs-to-limit-losses-in-flagship-fund