What happens to my principal if the market drops significantly?

Each position in ARKY has two relevant price levels: a coupon barrier and a maturity barrier. The coupon barrier, set at roughly 50 to 60% of the initial price, must be maintained for income to pay. The maturity barrier will usually mirror the coupon barrier and also be 50-60%. If a stock falls below the maturity barrier by the time the position reaches its expiration date, ARKY is exposed to the negative performance of that stock from the initial level, which can result in meaningful capital loss for that position. Because the portfolio holds 25 to 50 individual positions, the impact to the Fund as a whole would generally be limited to single digit percentages, depending on the number of notes held in the portfolio at that time. A breach in one note does not necessarily affect the rest, but a broad, sustained market decline could impact multiple positions simultaneously.