Cathie Wood’s fintech fund beats the market by redefining what fintech means

Cathie Wood’s blockchain and financial technology fund earned a 29% profit in 2025, bucking a weak trend across the sector by expanding what counts as financial technology stocks.

The ARK Blockchain & Fintech Innovation ETF, known as ARKF, stayed ahead by adding companies outside the usual fintech space. Holdings in artificial intelligence company Palantir Technologies Inc. climbed 135% over the year. Television streaming service Roku Inc. jumped 46%. These gains helped offset losses in traditional fintech areas. Bitcoin dropped 7% and cryptocurrency exchange Coinbase Global Inc. fell 9%.

Dan White helps manage the portfolio at ARK Investment Management. He explained, “It is a lot of different plays here, and we’re balancing the portfolio, pulling on levers here against those technologies to each other,” White said. “With Roku and Palantir, while they don’t look like traditional flavors of fintech, they certainly have an important role in the ecosystem.”

Fund strategy shifts from pure fintech play

ARK Investment Management’s fintech fund succeeded by moving away from a focused bet on the financial technology industry alone. Instead, it chased whatever market segments showed strength. Payment companies disappointed and digital currency values tumbled during the year. So the firm shifted toward technology businesses connected to artificial intelligence. Funds that adjusted their strategies to catch this wave posted better results. Those stuck with payments and crypto fell behind.

Other fintech funds showed mixed results. The Global X FinTech ETF and Siren NexGen Economy ETF both declined by small amounts in 2025. The Fidelity Crypto Industry and Digital Payments ETF posted gains in the double digits. So did the VanEck Digital Transformation ETF and iShares Blockchain and Tech ETF.

Expectations ran high for fintech and cryptocurrency after Donald Trump entered the White House last January. His administration was seen as friendlier to new technology. But major digital payment companies failed to deliver for shareholders in 2025. Cryptocurrency prices collapsed in October, dragging down the broader sector.

Eric Balchunas analyzes exchange-traded funds at Bloomberg Intelligence. He said cryptocurrency got ahead of itself. “Crypto in general front-ran the narrative,” Balchunas said. He pointed to Bitcoin’s 123% rise in 2024. “You just can’t pull that off every year.”

Crypto miners turn to AI for survival

Cryptocurrency companies that pivoted to artificial intelligence did better. Digital currency miners Hut 8 Corp. and Riot Platforms Inc. gained 124% and 24%. Some mining operations retooled their equipment to profit from AI demand. The Fidelity, VanEck, and iShares cryptocurrency funds all held mining companies.

Traditional payment stocks struggled badly. Fiserv Inc. sank 67% for the year after an October crash. Payment heavyweights PayPal Holdings Inc., Block Inc., and Global Payments Inc. each lost roughly one-quarter to one-third of their value. Adyen NV and Toast Inc. dropped by small percentages. The gap between payment stocks and AI-connected companies showed a bigger market change. Investors lost interest in crowded, low-margin fintech businesses last year.

Ram Ahluwalia runs investment adviser Lumida. He pointed to fierce rivalry in the sector. “In fintech, you see hyper-competition,” said Ahluwalia. “Everyone’s trying to be everything to everyone, and that competition is the enemy of profit and returns.” He said he doesn’t think the industry will do better in 2026.

ARKF owned shares in PayPal, Adyen, and Toast. But it also held a couple of fintech winners among its best performers. Robinhood Markets Inc. and Shopify Inc. rose 204% and 51% last year. White said ARK increased its stakes in these companies after taking some profits when Circle Internet Group Inc as reported by Cryptopolitan previously. went public in June. The stablecoin company ended the year up 156%. But it was down about 70% from its high point after listing that month.

Wood faces investor skepticism despite returns

Wood is a well-known Wall Street manager recognized for aggressive bets on new technologies. She gained fame during the pandemic with predictions about stocks like Tesla Inc. She attracted many individual investors and pushed ARK’s total assets above $60 billion at their peak.

Even with ARKF’s double-digit gains last year, Wood appears to face challenges turning her long-term outlook into steady investor interest. Apart from a short surge of over $600 million around September, ARKF saw mostly flat money flows last year. Big swings in the investor’s main ARK Innovation ETF over time have made many individual investors careful about returning to the firm’s funds.