Beating the market consistently is not easy. Most professional fund managers fail. But it is possible.
Over the next five years, I believe certain themes have the potential to deliver stronger growth than the broader Australian share market.
But rather than trying to pick individual winners with exposure to these themes, I think it could be a smart choice to use targeted exchange-traded funds (ETFs) to gain diversified exposure to those areas.
Here are three ASX ETFs I think could beat the market over the next five years.
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BetaShares Nasdaq 100 ETF (ASX: NDQ)
The NDQ ETF tracks the Nasdaq 100 Index, which includes some of the world's most recognised and fastest-growing companies.
The ETF provides access to global leaders in artificial intelligence, cloud computing, digital payments, biotechnology, and advanced consumer platforms. These businesses reinvest heavily in research and development and operate scalable business models that can expand margins over time.
While the BetaShares Nasdaq 100 ETF can be volatile in the short term, I think the long-term earnings growth of its underlying shares gives it the potential to outperform the Australian market.
BetaShares Global Cybersecurity ETF (ASX: HACK)
Cybersecurity is not just a trend. It is quickly becoming an ongoing necessity.
As digital systems become more interconnected and data volumes continue to expand, governments and corporations must invest in protecting their networks. What I like is that spending in this area tends to remain resilient, even when broader economic conditions soften.
The HACK ETF provides exposure to a global portfolio of cybersecurity specialists involved in cloud security, threat detection, and identity management. Over a five-year period, I believe this structural growth theme could outpace the broader market.
Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)
The VAE ETF offers exposure to Asia outside Japan, including China, Taiwan, India, and South Korea.
Asian markets have underperformed developed markets for much of the past decade, but they remain home to a large share of the global population and manufacturing base. The region includes major semiconductor manufacturers, fast-growing consumer markets, and expanding financial systems.
If economic growth in Asia accelerates or investor sentiment improves, the Vanguard FTSE Asia Ex-Japan Shares Index ETF could deliver stronger returns than the broader Australian market over the next five years.
Foolish takeaway
Outperforming the share market requires exposure to businesses and regions that can grow faster than average.
While no ETF guarantees success, the NDQ ETF, the HACK ETF, and the VAE ETF provide diversified access to structural growth themes that I think could deliver stronger returns over the next five years.
For investors willing to accept some volatility in pursuit of higher growth, these ASX ETFs are worth considering.
