ARK Blockchain & Fintech Innovation ETF

ARKF

Market cap $1.1B

ARK Blockchain & Fintech Innovation ETF offers thematic returns through growth stock exposure, benefiting from pro-risk environments and tech rallies. ARKF's portfolio remains stable, with robust revenue growth forecasts among top holdings and some modest EV/EBITDA valuations for high-growth tech stocks. Despite a high active share, the fund's returns are correlated with the broader market and big tech, suggesting market risk-on/risk-off flows drive performance.

Many financial companies are slow-growing and balance sheet intensive, making them more common in value funds and usually less appealing to growth strategies. However, there are asset-light firms that have competitive advantages and that are benefiting from secular trends.

ARK Fintech Innovation ETF is rated Hold due to its extreme growth tilt and elevated risk of drawdowns at current highs. ARKF offers better risk concentration than peer ARK ETFs, but still carries high volatility and requires careful timing for entry. Valuations for ARKF's top holdings are moderately expensive, supporting a Hold thesis rather than a Buy at current levels.

Cathie Wood, CEO & CIO of ARK Invest, speaks about market optimism, US inflation, the crypto industry and IPOs. Wood speaks with Bloomberg's Katie Greifeld, Eric Balchunas and Scarlet Fu on "Bloomberg ETF IQ".

The stock market has performed very well over the past year. Although it hasn't been without its volatile times, specifically around the president's reciprocal tariff announcements in April, the S&P 500 is up by more than 20% in a year.

Ark Invest CEO Cathie Wood is known for her stock picks over the last decade, handpicking many of the growth stocks that find their way into the company's ETFs.

For investors seeking low-cost exposure and passive income, exchange-traded funds (ETFs) offer an excellent way to get started.

Financial technology, or fintech, was one of the worst performing parts of the stock market in the 2022 bear market and for the roughly two-year period that followed. During the COVID-19 pandemic, the economy turned to online payments, cashless money transfers, and cryptocurrency interest surged.

ARK Fintech Innovation ETF has surged 51% since April, but I am downgrading to hold due to high valuation and looming seasonal headwinds. The ETF's concentrated, high-beta fintech portfolio is risky with a lofty PEG ratio and significant exposure to SMID caps. Technical indicators show ARKF is overextended, trading nearly 50% above its 200-day moving average and facing key resistance.

Ned Davis sees defense, nuclear, digital assets, and artificial intelligence benefiting from the passage of President Donald Trump's One Big, Beautiful Bill.