System and method for providing a mutual fund rating platform

• US 7,899,728 B2
• Filed: 03/31/2008
• Issued: 03/01/2011
• Est. Priority Date: 05/24/2007
• Status: Expired due to Fees

• Current Assignee: Sean J. Egan
• Original Assignee: Sean J. Egan
• Inventors: Egan, Sean J.
• Primary Examiner(s): Colbert; Ella
• Assistant Examiner(s): GREENE, DANIEL LAWSON
• Application Number:
  US12/078,395
• Publication Number:
  US 20080294570A1
• Time in Patent Office: 1,065 Days
• Field of Search: 705/36.R
• US Class Current: 705/36.00R
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and method are provided for assigning ratings (the “Ratings”) on mutual funds and other investment funds (collectively the “Funds”) based on various information gleaned from public and privately traded financial, currency, interest rate and other futures, along with options on said futures (collectively the “Futures”). In an illustrative implementation, the system can operate to combine information on the historical rates of return and variability in the rates of return of the Funds with the expected range of future returns for various asset classes as determined by the pricing of the Futures. Illustratively, the rating for the Funds (the “Rating”) can incorporate the range of expected future returns, the variability of past returns, and the level of risk.

Claims

1. A method for assigning ratings to a fund, comprising the steps of:

operating a server to calculate an expected return over a time period for a sector corresponding to the fund based on financial futures corresponding to the sector;

operating the server to calculate an expected range of returns for the sector based on prices of options for the futures;

operating the server to calculate an expected return for the fund over a time period based on the calculated expected return for the corresponding sector, and the expected range of returns for the corresponding sector; and

operating the server, based on information specific to the fund, to assign a rating based on the expected return for the fund.

2. The method of claim 1, wherein said information specific to the fund includes an annual return adjustment factor equal to the difference between the annualized returns for the fund and a median return for other funds in the sector.

3. The method of claim 1, wherein said information specific to the fund includes a factor for the extent to which the fund'"'"'s returns are below the median for that sector for a time period.

4. The method of claim 1, wherein, in the step of calculating expected annual returns for the fund, an adjustment for qualitative factors is made.

5. The method of claim 1, wherein said step of calculating an expected annual return comprises the steps of calculating a low, and a high expected annual return.

6. The method of claim 1, wherein said step of assigning a rating comprises assigning one of a plurality of ratings to each fund.

7. The method of claim 1 further comprising providing the rating to a participating user.

27. The method of claim 7, wherein:

the sector is one of U.S. large capitalization funds, U.S. small capitalization funds and European large capitalization funds;

the expected return over a time period for the sector is calculated based on an annualization of a current value of an index for the sector and a futures price for the sector;

the expected range of returns for the sector is calculated based on the prices of options for the futures and a option pricing model which is based on a current exercise prices of the options, a risk-free interest rate, current call prices for the options, and times until expirations of the options; and

the information specific to the fund is a negative variability which is a percentage factor equal to an extent to which returns for the fund are below a median return for a period of time.

28. The method of claim 27, wherein the period of time for determining the negative variability is divided into selected periods, and a difference between the returns for the fund and the median return are calculated for each period.

8. A method for predicting expected returns of a fund, comprising the steps of:

operating a server to calculate an expected return over a time period for a sector corresponding to the fund based on financial futures corresponding to the sector;

operating the server to calculate an expected range of returns for the sector based on prices of options for the futures; and

operating the server to calculate an expected annual return for the fund based on the expected annualized return for the corresponding sector, the expected range of returns for the corresponding sector and on information specific to the fund.

9. The method of claim 8, wherein said information specific to the fund includes an annual return adjustment factor equal to the difference between the annualized returns for the fund and a median return for other funds in the sector.

10. The method of claim 8, wherein said information specific to the fund includes a factor for the extent to which the fund'"'"'s returns are below the median for that sector for a time period.

11. The method of claim 8, wherein, in the step of calculating expected annual returns for the fund, an adjustment for qualitative factors is made.

12. The method of claim 8, wherein said step of calculating an expected annual return comprises the steps of calculating a low, and a high expected annual return.

26. The method of claim 8, wherein the expected return over the time period is an expected median return.

13. A system for assigning ratings to a fund, comprising:

means for calculating an expected return over a time period for a sector corresponding to the fund based on financial futures corresponding to the sector;

means for calculating an expected range of returns for the sector based on prices of options for the futures;

means for calculating an expected return for the fund over a time period based on the calculated expected return for the corresponding sector, the expected range of returns for the corresponding sector; and

means for assigning a rating based on the expected return for the fund using information specific to the fund.

14. The system of claim 13, wherein said information specific to the fund includes an annual return adjustment factor equal to the difference between the annualized returns for the fund and a median return for other funds in the sector.

15. The system of claim 13, wherein said information specific to the fund includes a factor for the extent to which the fund'"'"'s returns are below the median for that sector for a time period.

16. The system of claim 13, wherein said means for calculating expected annual returns for the fund comprises means for permitting a user to make an adjustment for qualitative factors.

17. The system of claim 13, wherein said means for calculating an expected annual return comprises means for calculating a low and a high expected annual return.

18. The system of claim 13, wherein said means for assigning a rating comprises means for assigning one of a plurality of ratings to each fund.

19. The system as recited in claim 13 further comprising a means for communicating the rating to a participating user.

20. A storage medium having stored therein a plurality of instructions, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the steps of:

calculating an expected return over a time period for a sector corresponding to a fund based on financial futures corresponding to the sector;

calculating an expected range of returns for the sector based on prices of options for the fixtures;

calculating an expected return for the fund over a time period based on the calculated expected return for the corresponding sector, the expected range of returns for the corresponding sector; and

on information specific to the fund, assigning a rating based on the expected return for the fund.

21. The storage medium of claim 20, wherein said information specific to the fund includes an annual return adjustment factor equal to the difference between the annualized returns for the fund and a median return for other funds in the sector.

22. The storage medium of claim 20, wherein said information specific to the fund includes a factor for the extent to which the fund'"'"'s returns are below the median for that sector for a time period.

23. The storage medium of claim 20, wherein in the step of calculating expected annual returns for the fund, an adjustment for qualitative factors is made.

24. The storage medium of claim 20, wherein said step of calculating an expected annual return comprises the steps of calculating a low, and a high expected annual return.

25. The storage medium of claim 20, further comprising providing the rating to a participating user.