Where the smart cash is?;Briefing;Analysis
The index - which includes teacher supply agencies and media groups as well as consultants - was launched, this month, by the Capital Strategies finance house. It paints a picture of a buoyant sector. By the start of this year, every pound;1,000 invested in education shares at the start of 1996 was worth pound;1,593. This compares with the pound;1,473 you would have got, on average, from other shares.
Government initiatives such as education action zones, increased investment in information technology and greater delegation of school budgets - along with hints that the private sector could take over failing local education authorities - have boosted the index.
In January last year, Michael Barber, head of the Government's standards unit, suggested that private firms should run zones, shares rocketed. Nord Anglia's share price doubled in under two months and as the graph shows, the education and training index leapt ahead of the rest of the market.
However, since the announcement of the first zones in June, shares have fallen back. Partly this is as a result of fears about the economy and problems within individual firms. But it is also a result of confusion over just how much the Government will allow the private sector to profit from state schools.
So if playing the markets is your game, now may be a good time to invest in education. But then again, perhaps not. The future success of companies such as Nord Anglia, depends largely on the opportunities they can exploit in the state sector. As Capital Strategies points out, only then are their shares likely to regain their lost value.
Until then they are likely to be at the whim of the latest Government spin.
"The Business of Education," published by Capital Strategies 0171 256 8000.