Radhika Parashar
Ark reportedly submitted a filing to the SEC last week
The ETFs are aimed at safeguarding ARKK share prices amid market volatility
If approved, this step will mark Ark’s first into the buffer ETF sector
Investor Cathie Wood’s Ark Investment Management is planning to launch four new exchange-traded funds (ETFs) in 2026, according to a fresh filing with the U.S. SEC. These proposed ETFs are strategized to mitigate the risks of financial losses impacting its principal Innovation Fund, ARKK amid the prevailing market volatility. An ETF can be explained as a basket of diversified assets like securities and bonds that trade like stocks and offer higher liquidity.
Understanding Ark’s ETFs plans
The four ETFs proposed by the Florida-based firm are – the Defined Innovation ETF, the Defined Innovation ETF, the Defined Innovation ETF, and the Defined Innovation ETF.
As per a Reuters report, each of these ETFs will be launched next year in a phased manner, each quarter. If approved by the SEC, the first will go live in January whereas the others will be launched in April, July, and October respectively.
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The ETFs have been designed to ensure that the share price of ARKK does not fall more than 50% despite market fluctuations. Investors engaging with these ETFs will only be able to churn profits from them if the share price of ARKK rises by over 5%. At the time of writing, the current share price of ARKK stood at $70.44, as per data by Market Watch.
Ark inspired by BlackRock?
Mammoths from the investment management sector have been using buffer ETF offerings as a means to limit losses in unstable markets. The Reuters report claimed that BlackRock, Allianz, as well as Innovator are other fund management firms that have implemented a similar strategy to maintain financial stability against market headwinds. If the SEC does approve these ETFs from Ark, it would be the company’s first foray into the buffer ETFs segment to join its contemporaries.
The company is seemingly looking to aid its biggest holdings that include Elon Musk’s Tesla, crypto exchange Coinbase, as well as Robinhood against the market volatility trigged by President Trump’s tariff war with other countries.
At present, the U.S. is in the process of finalising a comprehensive set of crypto rules to oversee the sector. The SEC has recently released some guidelines for the issuers of ETFs in order to make them safer for engagement. Under these directives, ETF issuers will have to explain details around custody arrangements and risks linked to ETF engagement to the investors in “plain English”.
