What does my expense fee cover?​

The expense fee, also known as the expense ratio, is the annual fee charged by an ETF and expressed as a percentage of an investment. It’s built into the price of the ETF—investors don’t pay it directly, but it does slightly reduce the fund’s performance over time.

In a buffered ETF, like the ARK Defined Innovation Exposure Term ETFs (ARK DIET), this fee covers several important components: 

• Portfolio Management – The cost of running the fund, including selecting and managing the options that create the buffer and upside structure. 

• Operations and Administration – Recordkeeping, regulatory filings, legal compliance, and auditing services. 

• Custody and Trading Costs – Holding and settling trades in both the underlying ETF (in the case of ARK DIET, ARKK – the ARK Disruptive Innovation ETF) and the FLEX options used in the buffer strategy. 

• Investor Support and Tools – Educational materials, websites, outcome charts, and transparency tools to help investors track and understand their investment. 

Because buffered ETFs like ARK DIET require specialized option strategies, they tend to have slightly higher expense ratios than traditional ETFs. However, the added cost reflects the structural protection and strategy design that help manage downside risk and shape returns.