The ARK Innovation ETF is posting strong performance in 2023 despite previous losses. However, will the fund win back investors?

The ARK Innovation ETF is posting strong performance in 2023 despite previous losses. However, will the fund win back investors?

According to a report by www.finanzen.ch,

After a difficult 2021 and 2022, the ARK Innovation ETF (ARKK) is expected to record a strong gain of 70.23 percent in 2023. This strong growth is primarily driven by a few stocks, most notably Coinbase and Roku. However, while the fund's positive performance is impressive, the ARK Innovation ETF is expected to see a net outflow in 2023 as long-term investors fail to pull out of the loss despite strong 2023. The fund had recorded a significant loss, particularly in the previous two years. This raises questions about whether the current strong performance is sustainable and whether the fund could survive another market crash or recession.

According to an analysis from the article by finanzen.ch, the chances of a positive performance of the ARK Innovation ETF in 2023 are good so far due to the strong growth of over 70 percent. The stocks from Coinbase and Roku, which make up around 18 percent of the entire fund portfolio, made a significant contribution to this positive development. Still, the fund is expected to see a net outflow as long-term investors fail to pull out of the red despite strong 2023. There is also concern that the fund could be brought to its knees again in the event of another market crash or recession, as many of the top holdings are not or only minimally profitable. Therefore, it is possible that the current strong performance will not last.

Overall, it is important to keep an eye on the fund's long-term stability and consider the impact of a potential net outflow. The strong performance in 2023 is impressive, but it remains to be seen whether the ARK Innovation ETF will be successful in the long term.