How do buffered ETFs rebalance?

Buffered ETFs, such as ARK’s Defined Innovation Exposure Term ETFs (ARK DIET)  do not “rebalance” in the traditional sense (like changing asset weights regularly). Instead, they go through a structured reset process at the end of each 12-month outcome period. This reset includes: 

• Closing out the existing options that shaped the previous year’s buffer and upside 
• Establishing a new set of FLEX options based on the current price and market conditions 

This is known as "re-striking" the structure. 

During the year, the buffered ETF typically does not make changes to the outcome framework, which stays fixed until the next reset. This design provides: 

• Predictability 
• Simplicity 
• Full transparency into the investment path