With markets in flux, finding exchange traded funds (ETFs) that have the potential to outperform the broader indices is something most investors are after. Indeed, many index funds move in direct proportion to the overall indices they track. But there are a range of other ETFs tracking specific sectors or trends that could beat the market, particularly if current trends continue and capital begins flowing into other asset classes.

I’ve decided to go with two relatively unconventional picks in this piece, looking at specific rally candidates in sectors that may be overlooked or under-loved by specific investors. There’s still record capital flowing into active ETFs, which signals many investors may be taking a more tactical approach to this market. If that’s the case, there are specific groups of stocks (and other assets) which could outperform, if this alpha continues to be chased.

With that said, here are two ETFs I think could be outperformance candidates if the right conditions emerge, for those with an higher-than-average risk tolerance level.

STKD Bitcoin & Gold ETF (BTGD)

One ETF I haven’t really dug into in the past, at least not in a material way, is the STKD Bitcoin & Gold ETF (NASDAQ:BTGD). This ETF is emerging as a unique investment vehicle in 2025, given this fund’s unique exposure to a mix of Bitcoin (BTC) and gold. The overall vision behind this fund is to take advantage of the time-tested resilience of gold, while mixing in the incredible upside potential of Bitcoin as an asset class.

In some ways, both assets have been viewed as relative safe haven bets, which could bode well if capital does rotate away from dollar-denominated assets. However, Bitcoin’s relatively high correlation to risk assets means that this discussion continues to ravage on, and that will likely be the case moving forward. 

That said, in terms of low-beta assets relative to the stock market, this ETF’s exposure to both gold and Bitcoin is intriguing. I do think that some portion of investor portfolios would do well being held in a mix of both, and that’s why this fund is included here. That said, it’s not for everyone, so do your own due diligence first before buying. 

Vanguard Information Technology ETF (VGT)

This next pick is a bit of a contrarian one. Indeed, we’ve seen technology stocks broadly hit by concerns around macro slowing, and other more macro headwinds of late. While long bond yields have come down (which should help many of the longer-duration assets held in this ETF), the Vanguard Information Technology ETF (NYSEMKT:VGT) has provided similar (dismal) returns on a year-to-date basis as most indices.

Much of this reality has to do with the fact that most indices are dominated by technology stocks. The broader outperformance of the tech sector has allowed most indices to continue to move higher, but that move hasn’t been as broad as many investors would have liked to have seen over the past few years. That said, investors in a fund like VGT have historically outperformed during this current cycle.

So, the thesis around holding such an ETF right now is pretty simple. This fund provides outsized exposure to tech, largely considered to be the key growth driver of the U.S. economy for the foreseeable future. And with an average annual return exceeding 13% since inception, VGT has consistently outperformed the S&P 500. For those who think these trends will continue over the next decade or so, overweighting such ETFs could continue to be the right move, particularly on this recent dip. We’ll see.

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