After bleeding billions from its flagship funds, Cathie Wood’s ARK Investment Management is reportedly taking a defensive turn. It is entering into the booming “buffer ETF” arena with a fresh lineup of loss-limiting products.
The firm filed proposals last week for four new exchange-traded funds, the ARK Q1, Q2, Q3, and Q4 Defined Innovation ETFs. These Exchange-traded funds are designed to cushion downside risks while limiting upside returns. Each product will follow a rolling 12-month strategy starting in January, April, July, and October, respectively. This space has turned out to be an investors’ hunt for protection in a slump while already being dominated by BlackRock, Allianz, and Innovator.
Ark bets big on buffer ETFs
According to the report, the proposed ETFs will aim to shield investors from around 50% of any decline in ARKK while offering full exposure to gains above a 5% threshold. ARKK is Ark’s $6.8 billion flagship innovation fund. It is expected that the buffer ETF market led by BlackRock could hit $650 billion by 2030.
It added that assets in defined-outcome ETFs have already hit $69 billion in 2025. In an environment marked by rate volatility, trade tensions, and rising geopolitical risks, downside protection is becoming a hot commodity.
Traditional, crypto, and all sorts of markets are already dealing with massive fluctuations led by an indecisive situation created by US President Donald Trump. In the fresh trade threats, Trump has set 14 countries on the list. This includes key US allies Japan and South Korea, on notice to face a 25% to 40% increase from August 1.
Source: Bloomberg.
ARK’s timing isn’t accidental as it is racking up strong returns in 2025. ARKK is up 50% over the past 12 months, and ARKW, the firm’s internet-focused fund, has gained 80%. The report mentions that the retail enthusiasm seems to be drying up as ARKK is now on pace for its 19th straight month of net outflows. It has shed $2 billion in the past year. ARKK price saw a minor decline in the last trading session. It traded around $70.44.
“These are like Diet Ark,” stated Eric Balchunas of Bloomberg Intelligence. “Investors want the kick, but without the sleepless nights.”
Cathie Wood rebalances Ark Invest
The buffer ETF push comes as Ark looks to fine-tune its core positions. On July 7, the firm added 659,428 shares of Beam Therapeutics (BEAM), approx. worth over $13 million. Meanwhile, it scaled back on Ionis Pharmaceuticals (IONS), 908 Devices (MASS), and Roblox (RBLX), too. It sold 12,143 shares of IONS (approx. worth $522K) through the ARKG ETF.
Spot Bitcoin ETFs posted a total net inflow of $217 million on July 7. This marks three consecutive days of net inflows, suggesting stable market conditions. However, ARK 21Shares Bitcoin ETF (ARKB) reported an outflow of $10.07 million in the same session. This comes in when ARKB saw a massive inflow of $114.25 million on July 3 (previous trading session).
Bitcoin price dropped marginally over the last 24 hours. BTC is trading at an average price of $108,382 at press time. It is still up by 87% over the last year. Bitcoin’s 24-hour trading volume spiked by 19% to hit $47.25 billion.
