Risk-On Revival: Growth-Themed ETFs Hit 52-Week Highs As Market Calms Down

After months of cautious positioning and defensive sector leadership, investor sentiment appears to be shifting decisively toward risk-on assets. Several growth-oriented and thematic ETFs notched fresh 52-week highs on Monday, reflecting renewed enthusiasm for innovation, technology, and discretionary spending plays.

At the forefront of this momentum are the flagship ETFs from ARK Invest. The ARK Fintech Innovation ETF ARKF surged past $45, while the ARK Next Generation Internet ETF ARKW crossed $135, both marking their highest levels in a year, according to Barchart. Cathie Wood's funds, known for their aggressive bets on disruptive technologies, have benefited from investor optimism around artificial intelligence, blockchain adoption, and a potential easing of macroeconomic headwinds.

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Joining the rally is the Alger AI Enablers & Adopters ETF ALAI, which climbed over 1.2% to a new high of $29.36. The fund provides exposure to companies positioned to benefit from the widespread adoption of artificial intelligence, a theme that has captured investor imagination since the generative AI boom took hold last year.

Meanwhile, the Roundhill Sports Betting & iGaming ETF BETZ also hit a new milestone, gaining 2.6% on the day. With names like DraftKings DKNG and Flutter Entertainment FLUT in its portfolio, BETZ represents a high-risk, high-reward corner of the market tied closely to consumer discretionary spending and regulatory developments.

Even broader allocation strategies are showing signs of risk appetite. The iShares Core Aggressive Allocation ETF AOA, which holds a mix of U.S. and international equities tilted toward growth, rose 0.78% to a 52-week high, indicating that investors are not only chasing niche themes but also expressing broader confidence in equity markets.

A Broader Shift Underway?

Market analysts attribute the surge in growth-themed ETFs to a confluence of factors: resilient economic data, moderating inflation, expectations of Federal Reserve rate cuts later this year, and strong earnings performance from tech giants.

The rally in these ETFs reflects a growing consensus that the U.S. economy might achieve a soft landing. When macro fear subsides, investors naturally rotate back into higher-growth, more volatile assets.

ARKW and ARKF in particular have become proxies for investor sentiment around next-generation tech, including blockchain, digital wallets, and AI. Despite past criticism over their high volatility, the funds have rallied sharply in 2025, with ARKW up over 23% year to date.

BETZ's strength, meanwhile, suggests discretionary themes are gaining favor again, an encouraging sign for sectors that depend on consumer confidence and disposable income. While not without regulatory risk, the legalization trend in online sports betting across several U.S. states continues to support the fund’s growth story.

Is This Rally Sustainable?

It should be noted that valuation risks remain elevated, and any disappointment in earnings or macro data could quickly reverse the risk-on trend.

Still, for now, the market appears to be in full growth mode. The simultaneous rise of thematic funds like ALAI, speculative bets like BETZ, and broader growth-tilted portfolios like AOA suggest this isn't a narrow rally driven by a few mega caps but a more widespread return of risk appetite.

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