Non-capitalization weighted stock market index and index fund or funds

• US 20060149645A1
• Filed: 06/03/2002
• Published: 07/06/2006
• Est. Priority Date: 06/03/2002
• Status: Abandoned Application

• Current Assignee: Research Affiliates LLC (Research Affiliates Global Holdings LLC)
• Original Assignee: Research Affiliates LLC (Research Affiliates Global Holdings LLC)
• Inventors: Wood, Paul Christoper
• Application Number:
  US10/159,610
• Publication Number:
  US 20060149645A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A method for the construction of a new type of stock market index, and stock market index fund, or funds where the index is constructed based upon the fundamental realities of the companies contained within the index rather than on the price, or market capitalization of the companies contained with the index. This fundamental data may include items such as the relative size of a collection of company'"'"'s profits or assets or any fundamental accounting data contained within a standard U.S. GAAP company annual report and accounts.

Claims

1. A method for the construction and management of a stock market index and stock market index funds containing a portfolio of stocks based on this index, wherein the stock market index is based on fundamental company data, the method comprising:

creating a stock market index, and at least one stock market index funds including a portfolio of stocks where the constituent weightings are based upon at least one fundamental accounting data regarding the companies whose stocks are included in the portfolio.

2. The method of claim 1, further comprising basing the constituent weightings upon at least one of a ratio and/or a manipulation of the fundamental accounting data.

3. The method of claim 1, wherein constituent weightings of the stocks within the fund are altered as the fundamental data concerning the companies in or outside the index changes.

4. The method of claim 3, wherein the constituent weightings of the stocks within the fund are altered when at least one of:

a company or companies report their quarterly and/or annual accounting information; and

/or at a pre-determined time after which the majority of companies in the index have reported their quarterly and/or annual accounting data.

5. The method of claim 1, wherein the fundamental accounting data includes data can be found within a standard U.S. generally accepted accounting principles (GAAP) company annual report and accounts.

6. The method of claim 1, wherein the fundamental accounting data includes at least one of:

relative size of a company'"'"'s profits, a company'"'"'s pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, and/or a return on investment.

7. The method of claim 1, wherein the fundamental accounting data comprise:

a weighted combination of sales, profits, cash flow, and another fundamental data point from a GAAP.

8. The method of claim 7, wherein the another fundamental data point comprises dividends.