Over the last three decades the Australian share market has provided investors with an average return of approximately 9.5% per annum.
This means that if you’re going to beat the market over the next decade, you’ll need to aim high and target returns of at least 10% per annum.
But which shares could be capable of beating the market in the 2020s? I think the two listed below could be market beaters:
a2 Milk Company Ltd (ASX: A2M)
I believe that a2 Milk Company could be a market beater over the next decade. This is due to its expanding fresh milk footprint and the growing demand for its infant formula in the China market. This strong demand was evident in the first half when a2 Milk Company’s China label infant nutrition sales doubled to NZ$146.7 million.
While this is a sizeable figure, the company only has a very modest market share. And due to its strong brand and increasing distribution network in the country, I expect the company to capture a greater slice of the market throughout the 2020s and drive further strong earnings growth.
SEEK Limited (ASX: SEK)
Another ASX share which I think could be a market beater in the 2020s is SEEK. While 2020 has been a difficult year for the job listings giant because of the pandemic, I believe its long term outlook is as positive as ever. This is due to its leadership position in the ANZ market and its rapidly growing China-based Zhaopin business.
It is the latter business which I expect to be the key driver of growth over the next decade. In the first half of FY 2020 it contributed 47.8% of SEEK’s total revenue. This is almost double the revenue contributed by the ANZ business. Given the size of the China market and its opportunities in other key Asian markets, I believe the company is well-placed to hit its revenue target of $5 billion later this decade. This compares to revenue of $1,537.3 million in FY 2019.
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More reading
- Is the SEEK share price a buy right now?
- 3 five-star ASX shares I would buy today
- ASX shares I’d buy if this decline is a second COVID-19 crash
- S&P quarterly rebalance: A2 Milk added to ASX 50 & NEXTDC in the ASX 100
- 3 of the best ASX 200 blue chip shares to buy today
Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why these ASX shares could help you beat the market appeared first on Motley Fool Australia.
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