What does “defined outcome” mean?
A defined outcome is a pre-set range of investment results, clearly laid out before someone invests. This means the investor knows:
- The maximum loss protected against (the buffer),
- The minimum gains needed before seeing a return (the hurdle),
- And the limit on how much gain can be received (the cap).
These outcomes are defined at the beginning of a 12-month period and stay fixed for that year. So, investors are not guessing what could happen—they can see the range of possible results based on how the underlying investment (in the case of the ARK DIET ETFs) - ARKK, the ARK Innovation ETF, performs.
Defined outcomes help investors:
- Understand potential risks and rewards
- Plan around specific timeframes (like retirement)
- Feel more confident investing in volatile areas like disruptive innovation