Exchange traded fund (ETF) investors seeking growth opportunities to add to their portfolios for 2023 and beyond may want to take a closer look at the education sector. More specifically, education technology for adults.
Per a McKinsey report, the education technology for adult learners is seeing a proliferation in growth over the last couple of years. Part of that was due to the onset of the pandemic in which social distancing measures forced more education online.
“Over the past couple of years, we’ve seen rapid growth in the education-to-employment segment of the edtech sector that serves adult learners,” the report said.
As result of this growth, more investment dollars are pouring into the education technology space. This should set things up nicely for ETFs that can capture this niche area of education and give investors exposure to this corner of the sector.
“Valuations for these education-to-employment edtech firms have had a roller-coaster ride, as existing companies attract a huge influx of capital, thousands of new players enter the field, and investors question what scalable and profitable business models look like in the space,” the report added. “There are now dozens of edtech ‘unicorn’ start-ups with valuations of more than $1 billion.”
Education Encapsulated in 1 ETF
Global X is always at the forefront of pushing the creative envelope with its thematic ETFs that not only capture the trends of today, but also those of tomorrow. As such, this provides investors with growth opportunities to add diversification to their portfolios.
Given the growth potency of online education in the coming years, an ETF to consider is the Global X Education ETF (EDUT). EDUT provides a unique take on equities with high exposure to the education theme by emphasizing exposure to companies that facilitate digital learning and educational content publishing for education at all levels globally.
Per its fund description, EDUT seeks to invest in companies providing products and services that facilitate education, including online learning and publishing educational content, as well as those involved in early childhood education, higher education, and professional education. At a 0.50% expense ratio, EDUT seeks to provide investment results that correspond to the Indxx Global Education Thematic Index.
Social distancing measures borne out of the ongoing pandemic caused many activities from work, entertainment, and education to shift to a home environment. As such, EDUT provides exposure to those engaged in online learning and publishing educational content, as well as those involved in early childhood education, higher education, and professional education.
Overall, EDUT provides:
- Long-term growth potential: Educational access is associated with many positive social and economic outcomes. Global X expects the convergence of technology and education to democratize access to learning around the world.
- Unconstrained approach: The education theme extends beyond the scope of any single country or public entity. EDUT invests accordingly, with global exposure across multiple sectors and industries.
- Conscious approach: EDUT incorporates the ESG proxy voting guidelines from Glass Lewis.
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