Exchange-traded funds (ETFs) may be the easiest way to invest in shares because of the instant diversification and laid-back way of making returns.
I think that there are a few ETFs that can beat the overall ASX share market return over the next five years.
These are two of the ETFs that I really like.
Betashares Global Cybersecurity ETF (ASX: HACK)
If you haven’t already guessed, the BetaShares it’s based on the global cybersecurity market with names like Broadcom, Fortinet, Cisco Systems, Palo Alto Networks, Infosys and Verisign.
There sadly seems to be a rise in cybercrime in Australia, and worldwide. But, there are a group of businesses that are trying to help.
This industry could be defensive because of how important protecting governments, intellectual property, bank accounts and so on, is. But, it could also deliver growth with expectations of ongoing revenue growth.
After the fall of around 30% since November 2021, I think the ETF is much better value.
Betashares Global Quality Leaders ETF (ASX: QLTY)
This ETF gives investors a diversified portfolio that is invested in 150 global companies around the world.
I like how the ETF is invested the most in industries with a lot of growth potential – IT, healthcare and industrials.
At the time of writing, the businesses with a weighting of more than 2% are: Meta Platforms, Novartis, Microsoft, L’Oreal, Nvidia, Novo Nordisk and Alphabet.
To be able to get into the portfolio, stocks have to do well on a combined ranking of four key factors – return on equity, debt to capital, cashflow generation ability and earnings stability.
I think this group of businesses, whichever companies are in it at the time, can deliver outperformance over the long-term.
Since the ETF started in November 2018, the Betashares Global Quality Leaders ETF has delivered an average return per year of 12.6%. If it can keep delivering returns of at least that level, I think that’d be a really good investment.
