rize education tech and...2 days ago · into the 21st century. the company helps investors,...
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Rize Education Tech and Digital Learning UCITS ETF (LERN)
O U T W I T H T H E O L D S C H O O L
An ETF that rises above the tide of conventionalism as your investments should
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Investment Case Why LERN?
Technology has the potential to tackle major challenges faced by the education sector. From promoting accessibility and inclusion, to empowering institutions and teachers, to supporting excellent student learning and outcomes, digital learning technologies can help elevate the education sector into the 21st century. We must build an education system that is more inclusive, no longer confined to the classroom, and which is able to transform all learners into lifelong learners. At a time of unprecedented automation, reskilling and upskilling have never been more vital, and advanced technologies such as gamification, virtual and augmented reality, and personalised and adaptive learning allow education to be tailored to people’s needs as they move through their lifecycles. Our ground-breaking investment strategy and ETF – Europe’s first education technology ETF – provides investors with exposure to companies that are building this new education ecosystem. These are companies that are using technology to best prepare the citizens of tomorrow.
• Favourable Growth Prospects LERN is Europe’s first education technology ETF, and provides investors with exposure to “EdTech” companies that are redefining how education is accessed, resourced and consumed around the world to deliver positive results for the individual and society.
• Powered by HolonIQ® LERN is purpose-built in collaboration with HolonIQ, a global education market intelligence firm based in Sydney, Australia, and leverages their unique insights and proprietary classification system of companies that are market leaders in digital and lifelong learning technologies.
• Unconstrained Approach LERN’s composition transcends classic sector, size and geographic classifications by tracking an emerging theme.
• ETF Efficiency In a single trade, LERN delivers access to dozens of companies that are favourably positioned to ride the tailwinds of the education tech and digital learning theme.
Key Risks: Please note that the value of an investment and any income taken from it is not guaranteed and can go down as well as up. You may not get back the amount you originally invested. If your investment currency is different to USD, then the return you will get from your investment may increase or decrease as a result of currency fluctuations between USD and your investment currency.
The potential tailwinds for these companies are far-reaching, and as the global learning landscape evolves, “EdTech” has the potential to become a multi-year investment opportunity as demand for the skills that will power the Fourth Industrial Revolution continues to grow.
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W H O S H O U L D C O N S I D E R T H I S E T F ?
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Investors Who Are...
Key Risks: Please note that the value of an investment and any income taken from it is not guaranteed and can go down as well as up. You may not get back the amount you originally invested. If your investment currency is different to USD, then the return you will get from your investment may increase or decrease as a result of currency fluctuations between USD and your investment currency.
• Seeking capital appreciation through investment in companies that are strategically positioned to benefit from the global adoption of digital and lifelong learning technologies.
• Interested in a diverse portfolio of stocks with a small to mid-cap bias, and minimal overlap to major benchmarks such as the S&P 500 or the Nasdaq.
• Education executives, business owners, academics or general market enthusiasts.
• Concerned about UN Sustainable Development Goals:– No. 4: Quality Education– No. 8: Decent Work and Economic Growth– No. 9: Industry, Innovation and Infrastructure– No. 10: Reduced Inequalities
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Source: HolonIQ 2020
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
The Evolution of SDG4
Achievement of Sustainable Development Goal 4 (SDG4) – “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”, may well be the most important of these global goals as it provides a foundation of human capital that is equipped to realise all SDGs.
Our partners HolonIQ have been tracking the conversation around SDG4 since their inception and this graphic provides a summary of the volume of global news and ‘signals’ that mention SDG4 over the past 5 years. Momentum has been building over the last 2 years and is likely to continue as SDG4 initiatives start to produce outcomes.
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Source: HolonIQ 2020
Education Expenditure Is Projected to Grow to USD 10 Trillion by 2030
Expenditure on education and training from governments, parents, individuals and corporates continues to grow to historic levels and is expected to reach USD 10 Trillion by 2030.
2005A
2010A
2015A
2020A
2025E
2030E
$0T $1T $2T $3T 4T $5T $6T $7T $8T $9T $10T
$2.8T
$3.5T
$4.2T
$5.2T
$6.3T
$7.8T
$10.0T
2000A
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Source: HolonIQ, World Health Organisation, Goldman Sachs and Standard & Poor’s 2020
$10T
$0T
$20T
$30T
$40T
$50T
$60T
$70T
$90T
$80T
Global GDP
$90T
Global Market Cap
$80T
Global Healthcare
Market
$10T
Global Healthcare Market Cap
$5T
Global Education
Market
$6.3T
Global Education
Market Cap
$150B
500 Million More Students by 2025: Education Companies Have a Lot of Room to Grow
By 2025, there will be half a billion more school and university graduates in the world than today, driven primarily by population growth in the developing countries. However, education is starved of capital, especially when compared against other sectors. Investment is going to be critical to supporting growth, innovation and access in the education sector. Hence education companies have a lot of room to grow.
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$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
Source: HolonIQ Smart Estimates 2019
Advanced Technologies Are Expected to Embed into Education Delivery and Learning Processes
Applications of advanced technology in education and learning is expected to begin to hit their strides by 2025 with virtual and augmented reality and artificial Intelligence becoming increasingly integrated into core education delivery and learning processes. Most likely starting in the corporate and non-accredited sectors.
AR / VR
2018 2018 2018 20182025 2025 2025 2025
AI Robotics Blockchain
$1.8B $0.8B $1.3 $0.1B$12.6B $6.1B $3.1B $0.6B
Source: HolonIQ 2020
Education Must Digitise to Scale
As a sector, education is a digitisation outlier, with less than 3% of overall expenditure allocated to digital, which presents a huge opportunity given the scale of what is to come.
Digital Spend
<3%
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9
10
Source: HolonIQ 2020
The Global Education Technology (“EdTech”) Market is Booming
Global EdTech expenditure is expected to reach USD 404 Billion by 2025, representing a 16.3% Compound Annual Growth Rate, or 2.5x growth, between 2019-2025.
$50B
$100B
$150B
$200B
$250B
$300B
$350B
$400B
$450B
$0B
20192018 2020 2021 2022 2023 2024 2025
$203B$163B
$163B
POST COVID16.3% CAGR
5.2% Digital Spend
2.7% Digital Spend
PRE COVID13.1% CAGR
$227B
$268B
$295B
$327B
$365B
$404B
$223B$247B
$272B
$304B
$341B
Short Term Surge Long Term Transition
Rough start to remote learning, normalising into sustained long-term digital integration.
Digital Infrastructure ‘Catch-Up”
Most schools and colleges are at the start of a long digital maturity journey.
Rise of B2C EdTech models
Students, parents and workers all looking for learning support, upskilling and other direct outcomes.
Mobile & Advanced Technology Enablers
Mobile, personalised, unbundled, social and gamified learning driven by mobility, big data, cloud and machine learning.
Education Technology spend to grow 2.5x from 2019 to 2025, still only representing 5.2% of total spend in global education and training.
2020 digital surge offset by ‘freemium’ phase through lockdown in an effort to secure share of school and institution demand.
Hardware, software and services all expected to accelerate as consumer preferences shift while government and corporates adjust to new learning models and modes.
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Source: HolonIQ 2020
Huge Uptick in the Number of Net New University Partnerships Since COVID-192020 will see almost 300 new University Partnerships, almost doubling the 2019 number of 153 as higher education accelerates its move to online learning, bringing the total number of partnerships today to over 1,000.
Online Program Manager (OPM) Partnerships Bootcamp Partnerships Pathways Partnerships Total 2H 2020 Forecast
2010
26
14
12
2011
26
215
2012
54
486
2013
47
425
2014
79
14
641
2015
66
15
483
2016
91
14
6512
2017
117
17
86
14
2018
132
14
100
18
2019
153
17
12313
2020F
274
5
137
85
47
2H F
orec
ast
+21.8%
+79.1%
Jul-Dec 2020 forecast based on Jan-Jun 2020 actuals.
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A Unique Approach to Thematic Investing
We believe out-of-the- box research has the power to unlock ground breaking insights.
We have created an ETF capability that leverages the best of thematic research and rules-based implementation to deliver solutions that are purpose-built for the thematic investing community. We achieve this by working with leading specialists in each of our themes, in addition to your typical index provider. In this way, we are able to purpose-build all of our investment strategies, which are then codified into indices. We believe that working with experts is the best way to successfully capture the secular, technical and behavioural drivers of a theme, and adopt a targeted approach in accessing the companies that are best placed to benefit.
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HolonIQ®
About The Partners
Rize ETF has partnered with HolonIQ Pty Ltd (“HolonIQ”) to power up the Rize Education Tech and Digital Learning UCITS ETF. HolonIQ is a global education market intelligence firm with a mission to bring together the technology, skills and capital needed to elevate education into the 21st century. The company helps investors, regulators, entrepreneurs and teachers alike understand how traditional educational paradigms are being disrupted by technology, so that they can make better and more informed decisions about the future of learning. The company’s machine learning and data-driven intelligence platform serves clients in more than 15 countries, including some of the world’s top educational organisations, K12 school networks, universities, startups and economic development agencies. The company is headquartered in Sydney, Australia.
Foxberry®
Rize ETF has engaged Foxberry Limited (“Foxberry”) to administer the index replicable by the Rize Education Tech and Digital Learning UCITS ETF. Foxberry are an independent index administrator with state-of-the-art index management, structuring, analysis and technological capabilities typically only found within top-tier investment banks. Foxberry is authorised and regulated by the FCA and registered under the EU benchmark regulation.
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The Foxberry HolonIQ Education Tech & Digital Learning Index provides exposure to companies that are developing and using digital and lifelong learning technologies, such as personalised and adaptive learning, e-classrooms, OERs, video and gamification, virtual and augmented reality, interactive modules and immersion technologies to redefine how education is accessed, resourced and consumed around the world to deliver positive results for the individual and society. The index follows a purity screened, modified liquidity-based weighting scheme where companies with higher liquidity achieve a bigger weight in the index.
About The Index
S T A T E O F T H E A R T I N D E X M A N A G E M E N T
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43.86%
8.26%
43.74%
16.18%4.14%52.8%
41.51%
2.25%1.94%
0.25%0.32%0.93%
27.67%
56.16%
Higher Education K12 Workforce Pre K
Small cap Mid cap Large cap
United States China Hong Kong Brazil
Australia Japan South Korea
HolonIQ Classification
Market Cap Breakdown
CountryBreakdown
Portfolio Characteristics
Source: Bloomberg as of close 31 July 2020
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Performance Over 5 Years
Foxberry HolonIQ Education Tech & Digital Learning Index NTR
400
350
300
250
200
150
100
50
Jul 2015 Jul 2016 Jul 2017 Jul 2018 Jul 2019 Jul 2020
MSCI All-Country World Investable Market Index NTR
Source: Bloomberg as of close 31 July 2020.Past performance is not a guide to future performance. The performance shown relates to the Foxberry HolonIQ Education Tech & Digital Learning Index NTR as compared against the performance of the MSCI All-Country World Investable Market Index NTR which tracks large, mid and small cap stocks across 23 developed and 26 emerging markets. Foxberry HolonIQ Education Tech & Digital Learning Index NTR: The calculation of this index began on 21 August 2020 and therefore it is not possible to show actual performance for any complete 12 month periods. Accordingly, the performance shown is simulated and based on back-tested data and relates to the period between 31 July 2015 and 31 July 2020. Simulated past performance does not represent actual performance and should not be used as a guide to actual or future performance. MSCI All-Country World Investable Market Index NTR: The performance shown is actual past performance and relates to the period between 31 July 2015 and 31 July 2020. Both indices: All performance and volatility data is in USD, unless otherwise stated. Volatility has been calculated as the five-year annualised standard deviation of the daily returns. The performance data shown does not reflect transaction costs and management fees incurred or charged by financial products such as the Rize Education Tech and Digital Learning UCITS ETF. Please note that the value of an investment and any income taken from it is not guaranteed and can go down as well as up. You may not get back the amount you originally invested. If your investment currency is different to USD, then the return you will get from the investment may increase or decrease as a result of currency fluctuations between USD and your investment currency.
Rebased to 100
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Performance Table & Risk Metrics
Indices • • • • • • • • • • • • • • • • • Returns in USD • • • • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • 1 year • • 3 years • 5 years • • • • Volatility • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Foxberry HolonIQ Education Tech & Digital Learning Index NTR • • • 32.8% • • 79.5% • • 215.8% • • • • 22.0% • • • • •
MSCI All-Country World Investable Market Index NTR • • • • • 6.1% • • 20.4% • • 40.7% • • • • 15.5% • • • • •
Source: Bloomberg as of close 31 July 2020.Past performance is not a guide to future performance. The performance shown relates to the Foxberry HolonIQ Education Tech & Digital Learning Index NTR as compared against the performance of the MSCI All-Country World Investable Market Index NTR which tracks large, mid and small cap stocks across 23 developed and 26 emerging markets. Foxberry HolonIQ Education Tech & Digital Learning Index NTR: The calculation of this index began on 21 August 2020 and therefore it is not possible to show actual performance for any complete 12 month periods. Accordingly, the performance shown is simulated and based on back-tested data and relates to the period between 31 July 2015 and 31 July 2020. Simulated past performance does not represent actual performance and should not be used as a guide to actual or future performance. MSCI All-Country World Investable Market Index NTR: The performance shown is actual past performance and relates to the period between 31 July 2015 and 31 July 2020. Both indices: All performance and volatility data is in USD, unless otherwise stated. Volatility has been calculated as the five-year annualised standard deviation of the daily returns. The performance data shown does not reflect transaction costs and management fees incurred or charged by financial products such as the Rize Education Tech and Digital Learning UCITS ETF. Please note that the value of an investment and any income taken from it is not guaranteed and can go down as well as up. You may not get back the amount you originally invested. If your investment currency is different to USD, then the return you will get from the investment may increase or decrease as a result of currency fluctuations between USD and your investment currency.
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ETF • • • • • • • • • Rize Education Tech and Digital Learning UCITS ETF • • • • • • • • • • • • • • • • •
Base Currency • • • • • • • USD • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Total Expense Ratio • • • • • 0.45% • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Inception Date • • • • • • • 27 August 2020• • • • • • • • • • • • • • • • • • • • • • • • • • •
ISIN • • • • • • • • • IE00BLRPQJ54 • • • • • • • • • • • • • • • • • • • • • • • • • • •
Base Code • • • • • • • • LERN • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Listings and Tickers • • • • • London Stock Exchange • • • • • • • • • • • • • • LERN (USD), LRNG (GBP) • • •
• • • • • • • • • • • Deutsche Börse • • • • • • • • • • • • • • • • LERN (EUR) • • • • • • •
• • • • • • • • • • • Borsa Italiana • • • • • • • • • • • • • • • • • LERN (EUR) • • • • • • •
• • • • • • • • • • • SIX Swiss Exchange • • • • • • • • • • • • • • • LERN (CHF) • • • • • • •
Index / Ticker • • • • • • • Foxberry HolonIQ Education Tech & Digital Learning Index NTR • • • • • • • • • • • • • • •
Thematic Industry Classification • • HolonIQ Education Tech & Digital Learning - Global Classification • • • • • • • • • • • • • •
Index Replication Method • • • • Physical - Full Replication • • • • • • • • • • • • • • • • • • • • • • • •
Income Treatment • • • • • • Accumulating • • • • • • • • • • • • • • • • • • • • • • • • • • •
UCITS • • • • • • • • • Yes • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Domicile • • • • • • • • Ireland • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Fund Type • • • • • • • • Irish ICAV • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Issuer • • • • • • • • • Rize UCITS ICAV • • • • • • • • • • • • • • • • • • • • • • • • • •
Promoter • • • • • • • • Rize ETF Limited • • • • • • • • • • • • • • • • • • • • • • • • • •
Investment Manager • • • • • Davy Global Fund Management Limited • • • • • • • • • • • • • • • • • • • • •
Manager • • • • • • • • Davy Global Fund Management Limited • • • • • • • • • • • • • • • • • • • • •
Depositary/Custodian • • • • • Northern Trust Fiduciary Services (Ireland) Limited • • • • • • • • • • • • • • • • • •
ISA Eligible (UK) • • • • • • Yes • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
SIPP Eligible (UK) • • • • • • Yes • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
UK Reporting Fund Status (UK) • • • Yes • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Equity Fund (Germany) • • • • • Yes • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Investment Fund Status (Germany) • • Yes • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Registered Countries • • • • • Austria, Finland, Germany, Ireland, Italy, the Netherlands, Sweden, Switzerland (Professional Investors Only) and the United Kingdom
Trading Information
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At Rize ETF, we believe there’s a better way to invest in the future. Our ETFs provide investors with unprecedented access to the megatrends that are transforming our world. We believe we’re pioneering a new way of investing, one that enables investors of all stripes to generate long-term returns whilst staying on the right side of history.
We are committed to challenging orthodoxy and providing investors with seamless access to the most ground-breaking megatrends shaping our planet.
R I Z E E T F I S E U R O P E ’ S F I R S T S P E C I A L I S T T H E M A T I C E T F I S S U E R
Important Information
Financial promotion: This document is issued by Rize ETF Limited. Rize ETF Limited is an Appointed Representative of Aldgate Advisors Limited, a firm authorised and regulated by the Financial Conduct Authority (FCA FRN 763187). Rize ETF Limited is registered in England and Wales number 11770079.
You should seek professional investment advice before making any decision to invest in a Fund.
This document is not being provided to you on the basis that you are a client of Rize ETF Limited. Rize ETF Limited is not acting on your behalf and is not responsible for providing protections that would otherwise be afforded to clients of Rize ETF Limited. This document is for information purposes only. Its contents, and the fact of its distribution, do not constitute investment advice, nor do they constitute tax, legal or any other form of advice. It does not constitute or form part of any offer to issue or sell, or the solicitation of any offer to buy or sell any investment. It shall not form the basis of, or be relied upon in connection with, any contract. Information and opinions contained herein have been compiled from sources believed to be reliable but neither Rize ETF Limited nor any of its partners makes any representations as to its accuracy or completeness. Any opinions, forecasts or estimates herein constitute a judgement that is subject to change without notice. Rize ETF Limited disclaims all liability and responsibility arising from any reliance placed by any person on the information contained within this document.
Where past performance and projected performance information is shown, it must be noted that past performance and projected performance is not a reliable indicator of future performance. Simulated past performance does not represent actual past performance and is not a reliable indicator of future performance.
The Rize Education Tech and Digital Learning UCITS ETF replicates the Foxberry HolonIQ Education Tech & Digital Learning Index. An investment in the Fund involves significant risk and is subject to the volatility of technology stocks and exchange rate fluctuations and you may lose some or all of your capital.
Capital at Risk Warning – Please note that the value of an investment and any income taken from it is not guaranteed and can go down as well as up. You may not get back the amount you originally invested. If your investment currency is different to the Funds’ currency of denomination (USD) or the currencies in which the Funds’ assets are denominated (which may be a range of different global currencies), then the return you will get from your investment may increase or decrease as a result of currency fluctuations between your investment currency and such currencies.
The products referred to in this document are offered by Rize UCITS ICAV (the “ICAV”). The ICAV is an open-ended Irish collective asset management vehicle which is constituted as an umbrella fund with variable capital and segregated liability between its sub-funds (each, a “Fund”) and registered in Ireland with registration number C193010 and authorised by the Central Bank of Ireland as a UCITS. The ICAV is managed by Davy Global Fund Management Limited. The prospectus, the Key Investor Information Documents (KIIDs), the constitutional document and the latest annual and semi-annual reports relating to the ICAV, the latest Net Asset Values of the Funds and details of the underlying investments of the Funds (together, the “Fund Information”)
are available at http://www.rizeetf.com. Any decision to invest must be based solely on the Fund Information. Investors should read the Fund-specific risks in the ICAV’s prospectus and the KIIDs. The indicative intra-day net asset values of the Funds are available at http://www.solactive.com.
The Funds are not offered or aimed at residents in any country in which (a) the ICAV and the Funds are not authorised or registered for distribution and where to do so is contrary to the relevant country’s securities laws, (b) the dissemination of information relating to the ICAV and the Funds via the internet is forbidden, and/or Rize ETF Limited is not authorised or qualified to make such offer or invitation.
The Funds may be registered or otherwise approved for distribution to the public or certain categories of investors in one or more European jurisdictions. Where this is the case, a country-specific web page and copies of the Fund Information will be available at http://www.rizeetf.com. The fact of such a registration or approval, however, does not mean that any regulator (including the FCA) has determined that the Funds are suitable for all categories of investors.
United Kingdom: This is a financial promotion. For the purposes of the United Kingdom Financial Services and Markets Act 2000 (“FSMA”), the ICAV is a UCITS that has been recognised by the Financial Conduct Authority (the “FCA”) pursuant to s.264 of the UK Financial Services and Markets Act 2000. The Fund Information is available in English free of charge upon request from the Facilities Agent in the United Kingdom, Davy Global Fund Management Limited, at Dashwood House, 69 Old Broad Street, London, EC2M 1QS.
Germany: This is a financial promotion. The offering of the Shares of the ICAV has been notified to the German Financial Services Supervisory Authority (BaFin) in accordance with section 310 of the German Investment Code (KAGB). The Fund Information in English (and the KIIDs in German language) can be obtained free of charge upon request from the Information Agent in Germany, German Fund Information Service Ug (Haftungsbeschränkt), at Zum Eichhagen 4, 21382 Brietlingen, Germany.
Switzerland: The Representative in Switzerland is 1741 Fund Solutions AG, Burggraben 16, CH-9000 St. Gallen. The Paying Agent in Switzerland is Tellco AG, Bahnhofstrasse 4, PF 713, CH-6430 Schwyz. The Prospectus, Key Investor Information Document, the constitutional document of the ICAV as well as the annual and semi-annual reports of the ICAV may be obtained free of charge from the Representative.
Austria: This is a marketing communication and serves exclusively as information for investors. Under no circumstances may it replace advice regarding the acquisition and disposal of investments which may result in a total loss of the investment. The Fund Information in English (and the KIIDs in German language) can be obtained free of charge upon request from the Paying and Information Agent in Austria, Erste Bank der oesterreichischen Sparkassen AG, Am Belvedere 1, 1100 Vienna, Austria.
United States: This document and its contents are not directed at any person that is resident in the United States (“US person”), and no offer or invitation is made to any US person to acquire or sell any service, product or security referred to. The provision of any information in this document does not constitute an offer to US persons to purchase securities.
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F U T U R EF I R S TE T F S
rizeetf.com