Exchange Traded Fund or the Like Related to Basket of Fixed Income Securities Having Similar Maturities

• US 20070112657A1
• Filed: 10/03/2006
• Published: 05/17/2007
• Est. Priority Date: 10/03/2005
• Status: Abandoned Application

• Current Assignee: John Huber
• Original Assignee: John Huber
• Inventors: Huber, John
• Application Number:
  US11/538,395
• Publication Number:
  US 20070112657A1
• 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 40/06 Asset management; Financial planning or analysis

Abstract

An exchange traded fund (ETF) is composed of a basket of fixed income securities. The fixed income securities have maturity dates within a relatively narrow range from a predefined range of each other (e.g., within approximately from five years from the launch of the ETF). The ETF pays interest to its owners. After the maturity dates, the ETF pays the principal to its owners and ceases operation. The ETF therefore has performance characteristics similar to an individual bond while having the diversification benefits of a traditional ETF or other fund.

Claims

1. An exchange traded fund having owners, the fund comprising:

a portfolio of multiple fixed income securities, wherein each of the securities has a value and each of the securities generate interest,

wherein each of the securities has a same maturity, within a defined range;

wherein the securities mature on a same date, within a defined range;

wherein the fund pays the owners an amount of the generated interest at defined intervals; and

wherein, after the securities mature, the fund pays the owners an amount based on the value of the securities.

2. The fund of claim 1, wherein the fund is an open-end index fund.

3. The fund of claim 1, wherein the fund is a unit investment trust.

4. The fund of claim 1, wherein the fund is a grantor trust.

5. The fund of claim 1, wherein the maturity is between 3 and 30 years.

6. The fund of claim 1, wherein the securities comprise fixed-rate coupon bonds.

7. The fund of claim 1, wherein the securities comprise floating-rate bonds, and further comprising an interest rate swap referenced to the maturity.

8. An exchange traded fund comprising:

means for generating income for a predefined period of time, wherein the means comprise a portfolio of interest bearing securities having a common maturity and a common maturity date;

means for distributing income produced from the means for generating income to an owner of the exchanged traded fund at periodic intervals;

means for distributing the principal of the interest bearing securities to an owner of the fund upon maturity.

9. The fund of claim 8, wherein the means for generating income comprise fixed-rate coupon bonds.

10. The fund of claim 9, wherein the securities comprise floating-rate bonds, and further comprising an interest rate swap referenced to the maturity.

11. An investment method comprising the following steps:

purchasing an exchange traded fund comprising multiple fixed income securities, each of the securities having the same maturity within a defined range and maturing on the same date within a defined range;

receiving interest generated from the multiple fixed income securities at periodic intervals;

receiving an amount based on the value of the multiple fixed income securities at maturity, thereby concluding the investment.