Education is an evolving and investable field, meaning the Global X Education ETF (NASDAQ: EDUT) could prove to be one of the more well-time new ETFs of 2020.
EDUT debuted on July 14 and tracks the Indxx Global Education Thematic Index. The new ETF’s 36 companies span companies engaged in “online learning and publishing educational content, as well as those involved in early childhood education, higher education, and professional education,” according to Global X.
EDUT is a prime avenue for investors looking to access evolving trends in how education is delivered and how workers access skills needed for the jobs of the future.
“The skillsets employers demand is evolving quickly and will likely continue to – the Institute for the Future estimates that 85% of the jobs today’s students will have in 2030 don’t exist yet,” said Global X in a research report. “The surging value of education in the workforce is driving strong growth across the global industry, with revenues expected to rise from $6T in 2020 to $10T in 2030.”
Evaluating EDUT
EDUT provides exposure to six industry groups – higher and professional education, online learning, video communications, educational content, early childhood education, and digital learning platforms.
Indeed, EDUT is heavy on “EdTech” names, a group of companies that are in the spotlight because of the COVID-19 pandemic.
“We can look to COVID-induced school closings for the most immediate use case. Cloud-based video conferencing software became virtual classrooms,” notes Global X. “Online learning applications became curriculums and textbooks. And digital learning platforms became teacher’s assistants, helping teachers organize and deliver coursework while giving students a place to interact with their teachers. According to an EY-Parthenon survey conducted at the height of the pandemic, 70% of students reported using third-party technology solutions to continue their education at home.”
EDUT could prove relevant over the near-term if a second wave of coronavirus cases force school closures and/or more parents to work from home.
“Online learning can give parents and working individuals the ability to attend classes while keeping their schedules flexible. In the U.S., where geographical constraints for education are minimal, 34.7% of those enrolled at higher education institutions engaged in some type of distance learning in 2019, up from 26.4% in 2013,” according to Global X.
The new EDUT charges 0.50% per year or $50 on a $10,000 investment.
For more on thematic ETFs, please visit our Thematic Investing Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.