Global X expands thematic offering with education ETF

Jul 17th, 2020 | By | Category: Equities

Global X has expanded its suite of thematic equity products with the launch of an ETF targeting companies that provide products and services that facilitate education.

Jay Jacobs, Head of Research and Strategy at Global X.

Jay Jacobs, Head of Research at Global X.

The Global X Education ETF (EDUT US) has a worldwide focus and a scope that includes companies involved in online learning and educational content, as well as providers of early childhood education, higher education and professional education.

The fund has listed on Nasdaq Exchange and comes with an expense ratio of 0.50%. Distributions are sent to investors on a semi-annual basis.

Jay Jacobs, Head of Research at Global X, commented, “At all levels of the education ecosystem, there are massive opportunities for innovative companies to facilitate the pursuit of knowledge.

“With EDUT, we’re aiming to provide access to companies that are developing these critical tools and making education accessible to virtually anyone, anywhere.”


The ETF is linked to the Indxx Global Education Thematic Index which selects its constituents from a universe of developed and emerging market companies that have a minimum market capitalization of $100 million and an average daily trading value above $2m.

The methodology seeks out firms that derive more than 50% of their revenue from across five education-related categories: educational content & publishing; online learning; early childhood education; higher & professional education; and education finance, housing, and services.

Where feasible, the index selects the 100 largest pure-play education companies and weights them by market capitalization subject to a single stock cap of 10%. Additionally, the aggregate weight of the five largest constituents is capped at 45%, while the weight of any other security is capped at 4.75%.

The index is reconstituted and rebalanced in June with buffer rules helping to limit unnecessary turnover.

The index presently falls some way short of its 100 stock target and currently consists of just 36 constituents. Companies from the US and China dominate the index with weights of 43.5% and 36.5% respectively, while Japan (6.6%), the UK (6.4%), and Brazil (3.7%) make up the next largest country exposures.

The largest companies in the index are TAL Education (10.3%), New Oriental Edu & Tech (8.7%), GSX Techedu (8.2%), Zoom Video Communications (7.0%), and Pearson (6.4%).

The fund is the first ETF to target education as an investment theme and seeks to participate in the sector’s strong predicted growth with global revenues estimated to swell from $6 trillion to $10trn over the next decade. According to Global X, this growth will be driven by increased awareness of the relationship between education, job security, and social mobility.

The firm also notes that the education theme may be especially relevant considering social and demographic changes brought on by the Covid-19 pandemic such as heightened competition for jobs and greater need for skills differentiation. Additionally, restrictions placed upon traditional physical schooling have accelerated the adoption of new innovative learning solutions, leading to further growth drivers within the sector.

Tags: , , , , ,

Leave a Comment