Non-capitalization weighted fundamental indexing system, method and computer program product
First Claim
1. A method of constructing a non-capitalization weighted portfolio of assets, comprising:
- (a) gathering data about a plurality of assets;
(b) selecting a plurality of assets to create the index of assets; and
(c) weighting each of said plurality of assets selected in the index based on an objective measure of scale of said each of said plurality of assets, wherein said weighting comprises;
(i) weighting at least one of said plurality of assets; and
(ii) weighting other than weighting based on at least one of market capitalization, equal weighting, and/or share price weighting.
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Accused Products
Abstract
A passive investment system based on indices created from various metrics is disclosed. The indexes may be built with metrics other than market capitalization weighting, price weighting or equal weighting. These metrics may include, but are not limited to book value, sales, revenue, earnings, earnings per share, income, income growth rate, dividends, dividends per share, earnings before interest, tax, depreciation and amortization, etc. Non-financial metrics may also be used to build indexes to create passive investment systems. Additionally, a combination of financial non-market capitalization metrics may be used along with non-financial metrics to create passive investment systems. Once the index is built, it may be used as a basis to purchase securities for a portfolio. As the data underlying the indexes changes because of, e.g., economic activity, the index may be updated and may be used as a basis to rebalance the portfolio. Alternatively, the index can be rebalanced when a pre-determined threshold is reached. Specifically excluded are widely-used capitalization-weighted indexes and price-weighted indexes, in which the price of a security contributes in a substantial way to the calculation of the weight of that security in the index or the portfolio. Valuation indifferent indexes of the present invention avoid overexposure to overvalued securities and underexposure to undervalued securities, as compared with conventional capitalization-weighted and price-weighted. Also specifically excluded are equal weighting weighted indexes.
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Citations
45 Claims
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1. A method of constructing a non-capitalization weighted portfolio of assets, comprising:
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(a) gathering data about a plurality of assets;
(b) selecting a plurality of assets to create the index of assets; and
(c) weighting each of said plurality of assets selected in the index based on an objective measure of scale of said each of said plurality of assets, wherein said weighting comprises;
(i) weighting at least one of said plurality of assets; and
(ii) weighting other than weighting based on at least one of market capitalization, equal weighting, and/or share price weighting. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37)
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38. A system for constructing a non-capitalization weighted portfolio of assets, comprising:
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means for gathering data about a plurality of assets;
means for selecting a plurality of assets to create the index of assets; and
weighting means for weighting each of said plurality of assets selected in the index based on an objective measure of scale of said each of said plurality of assets, wherein said weighting means comprises;
means for weighting at least one of said plurality of assets; and
means for weighting other than weighting based on at least one of market capitalization, equal weighting, and/or share price weighting.
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39. A computer-implemented non-capitalization weighted portfolio of assets construction system, comprising:
a processor adapted to gather data about a plurality of assets;
adapted to select a plurality of assets to create the index of assets;
adapted to weight each of said plurality of assets selected in the index based on an objective measure of scale of said each of said plurality of assets;
adapted to weight at least one of said plurality of assets; and
adapted to weight other than based on at least one of market capitalization, equal weighting, and/or share price weighting.
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40. A machine readable medium that provides instructions which when executed by a computing platform, cause said computing platform to perform operations comprising a method of constructing a non-capitalization weighted portfolio of assets, the method comprising:
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(a) gathering data about a plurality of assets;
(b) selecting a plurality of assets to create the index of assets; and
(c) weighting each of said plurality of assets selected in the index based on an objective measure of scale of said each of said plurality of assets, wherein said weighting comprises;
(i) weighting at least one of said plurality of assets; and
(ii) weighting other than weighting based on at least one of market capitalization, equal weighting, and/or share price weighting.
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41. A computer-implemented method for construction and management of a stock market index and at least one stock market index fund containing a portfolio of stocks based on the index, wherein weighting of the index is based on fundamental company data rather than on stock prices or market capitalization, the computer-implemented method comprising:
creating a stock market index, and at least one stock market index fund containing a portfolio of stocks wherein the constituent weightings of the stocks in the stock market index fund are based upon any fundamental accounting data regarding the companies associated with the stocks that can be found within a standard company annual report and accounts. - View Dependent Claims (42, 43, 44)
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45. A computer implemented method comprising:
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(a) gathering data using a computer about a plurality of assets;
(b) selecting one or more of said plurality of assets to create an index; and
(c) weighting, using the computer, each of said plurality of assets selected in the index based on a comparison of said gathered data with a measure of scale of said plurality of assets, wherein said weighting is weighting other than weighting based on at least one of market capitalization, equal weighting, and/or share price weighting.
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Specification