Overview
The PPA EdTech Index tracks the price movements in shares of companies engaged in the new and alternative ways of providing technology-enabled education and educational tools.
Investment Case
In the fast-paced world of today, education becomes ever more important. At the same time, the traditional teaching methods in many cases become slower, less effective and increasingly expensive. As new learning methodologies and technologies emerge, the new industry of educational technology, or EdTech, picks up steam. Innovation in education is not just about technology, but also about fundamentally changing the way students learn. The investment case, therefore, applies not only to the pure technology companies, but also to those innovating education in other ways.
In addition to Pre-K-12 and post-secondary education, significant demand has emerged in another market. It’s the consumer- and corporate-focused learning companies such as those used for continuing education and job training, and it includes technologies such as Artificial Intelligence and Virtual Reality.
In 2017alone, edtech investment reached a record high of over 9.52 billion, up 30% from 2016. The total market opportunity has been estimated at $250 billion in 2017, according to venture capital sources.
Index Construction & Methodology
| Index universe selection | US listed or sponsored ADR |
| Inclusion & Liquidity Requirement | Min $100M market cap, $5 share price and 50K share 3-month trading volume |
| Currency | USD |
| Total Holdings | 30 |
| Weighting | Modified, capped, market cap |
| Rebalance | Quarterly |
Constituents – Top Components
| Component | Sector | Weighting |
|---|---|---|
| New Oriental Education & Technology Group (EDU) | EdTech – China | 15.3% |
| TAL Education Group (TAL) | EdTech – China | 15.0% |
| Grand Canyon Education (LOPE) | Degree Programs | 10.8% |
| 2U Inc. (TWOU) | EdTech – Post-Secondary | 7.2% |
| Chegg (CHGG) | EdTech – Secondary | 6.1% |
Disclosure: The information provided on this page is for illustrative purposes only and is not intended to serve as investment advice. The information provided is as of particular time (06/15/2018) and subject to change at any time without notice. For more information, please contact PPA Indexes.