SYSTEM, METHOD, AND COMPUTER PROGRAM PRODUCT FOR MANAGING A VIRTUAL PORTFOLIO OF FINANCIAL OBJECTS

• US 20100063942A1
• Filed: 09/07/2009
• Published: 03/11/2010
• Est. Priority Date: 04/10/2002
• Status: Active Grant

• Current Assignee: Research Affiliates LLC (Research Affiliates Global Holdings LLC)
• Original Assignee: Research Affiliates LLC (Research Affiliates Global Holdings LLC)
• Inventors: Wood, Paul C., Arnott, Robert D.
• Granted Patent: US 8,374,951 B2
• Time in Patent Office: Days
• US Class Current: 705/36.T
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• 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
• CPC Class Codes: G06Q 40/10 Tax strategies
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A system, method and/or computer program product for managing an index and/or a portfolio of financial objects. An index may be created, which may include selecting financial objects based on accounting data and/or weighting the financial objects based on accounting data. A portfolio may be created based on the index. A plurality of investment managers may manage a plurality of accounts for a plurality of investors. The investors may directly hold assets in the accounts so that the investors may take advantage of any tax benefits generated by transactions using the assets in the accounts. An investor(s) may have one or more accounts and thus one or more managers. A manager may have one or more investors and thus one or more accounts to manage. A virtual mutual fund manager may use a holdings matrix and a lot matrix to track the asset lots in the accounts. When a manager wishes to make a trade affecting an investor, the virtual mutual fund manager may determine which asset lots held by the investor should be used to execute the trade. Optionally, each investor may be associated with a tax-managed account. The tax-managed account may be used by the virtual fund manager to make deferred “paper” trades thereby avoiding certain adverse tax consequences that may be created when an investor has multiple managers. Optionally, each investor may allow loss-harvesting trades to be executed on his or her behalf in circumstances where such trades may reduce the investor'"'"'s tax obligations.

Claims

1. A method of providing a computer-implemented trading platform for intercepting trades, coordinating trading or preventing offsetting trades of one or more financial objects, the method being executed on a data processing system, the method comprising:

providing, receiving or accessing by at least one computer taxation rules;

determining by the at least one computer if a trade using said selected lot should be deferred using a computer database and said taxation rules;

generating by the at least one computer a deferred trade in a tax-managed sub-account if it is determined that said requested trade should be deferred;

selecting by the at least one computer said deferred trade in said tax-managed sub-account for execution if it is determined that said deferred trade should no longer be deferred using said computer database and said taxation rules;

managing a virtual portfolio of the financial objects by the at least one computer, wherein said virtual portfolio comprises a collection of the financial objects managed collectively but tracked separately with separately owned lots on behalf of a plurality of investors,

wherein the financial object comprises at least one of;

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets, a portfolio of assets tracking an index, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund;

providing, receiving or accessing the at least one computer database associating a plurality of lots owned by each of said plurality of investors and associating by the at least one computer said plurality of lots as tradable regardless of an initiator of the purchase of said plurality of lots;

providing, receiving or accessing lot selection rules comprising investment management rules comprising at least one of;

coordinating trades, enforcing compliance with policy, or preventing offsetting trades comprising avoiding both purchasing and selling the same lot;

receiving by the at least one computer, a requested trade; and

selecting by the at least one computer, a lot for trading from said plurality of lots using said computer database, said lot selection rules, and said requested trade.

2. The method of claim 1, further comprising:

managing a plurality of virtual portfolios of the financial objects by the at least one computer, with separate lots owned by one or more individual investors and tracked separately;

receiving by the at least one computer, investments by the one or more individual investors;

purchasing the plurality of virtual portfolios of the financial objects by the at least one computer, using said investments, wherein the plurality of virtual portfolios of the financial objects are purchased according to an index of the financial objects which is constructed without influence of prices of the financial objects, said index constructed by a construction method comprising;

i) determining by the at least one computer, at least one selection rule, and at least one weighting rule;

ii) receiving data by the at least one computer comprising;

receiving data by the at least one computer, regarding publicly traded financial objects,

receiving data by the at least one computer, regarding a plurality of entities, each associated with the publicly traded financial objects, and

receiving data by the at least one computer, regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) selecting by the at least one computer, constituent selected financial objects of said index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

wherein said selecting is exclusive of a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) weighting by the at least one computer, said constituent selected financial objects of said index to obtain constituent weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

providing, receiving or accessing a computer-implemented lot matrix associating a plurality of lots with said plurality of virtual portfolios, each lot of said plurality of lots tradable regardless of an initiator of purchase of said lot and associating said plurality of lots as separately owned by said one or more investors,

wherein the financial object comprises at least one of;

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets tracking an index, a portfolio of assets, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund;

providing, receiving or accessing lot selection rules comprising investment management rules comprising at least one of;

coordinating trades, enforcing compliance with policy, or preventing offsetting trades comprising avoiding both purchasing and selling the same lot;

receiving by the at least one computer, a requested trade;

for each of said plurality of virtual portfolios, performing the following;

for said requested trade, selecting by the at least one computer, a lot from said plurality of lots for execution of said requested trade using said lot selection rules, and said lot matrix; and

altering the plurality of virtual portfolios by the at least one computer, comprising at least one of buying or selling the financial objects, according to changes in said index over time.

3. A data processing system for managing one or more financial objects comprising:

at least one computer processor;

instructions for managing a virtual portfolio of the financial objects by the at least one computer processor wherein said virtual portfolio comprises a collection of the financial objects managed collectively but tracked separately with separately owned lots on behalf of a plurality of investors,

wherein the financial object comprises at least one of;

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets, a portfolio of assets tracking an index, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund;

a computer database accessible by the at least one computer processor associating a plurality of lots of said plurality of investors and associating said plurality of lots as tradable regardless of an initiator of the purchase of one of said plurality of lots; and

a computer memory coupled to the at least one computer processor and having program instructions stored therein, the at least one computer processor programmed to execute said program instructions, said program instructions comprising;

lot selection rules comprising investment management rules comprising at least one of;

coordinating trades, enforcing compliance with policy, or preventing offsetting trades comprising avoiding both purchasing and selling the same lot; and

instructions for receiving a requested trade; and

selecting a lot for trading from said plurality of lots using said computer database, said lot selection rules, and said requested trade;

taxation rules;

instructions for determining if a trade using said selected lot should be deferred using said computer database and said taxation rules, and generating a deferred trade in a tax-managed sub-account if it is determined that said requested trade should be deferred; and

instructions for selecting a deferred trade in said tax-managed sub-account for execution if it is determined that said deferred trade should no longer be deferred using said computer database and said taxation rules;

instructions for receiving investments by the plurality of investors;

instructions for purchasing the virtual portfolio of the financial objects by the at least one computer processor using said investments, wherein the virtual portfolio of the financial objects is purchased according to an index which is constructed without influence of prices of the financial objects, said index constructed by a construction method comprising;

i) determining by the at least one computer processor at least one selection rule, and at least one weighting rule;

ii) receiving data by the at least one computer processor comprising;

receiving by the at least one computer processor, data regarding publicly traded financial objects,

receiving by the at least one computer processor, data regarding a plurality of entities, each associated with the publicly traded financial objects, and

receiving by the at least one computer processor, data regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) selecting by the at least one computer processor, constituent selected financial objects of said index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) weighting by the at least one computer processor, said constituent selected financial objects of said index to obtain constituent weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

instructions for altering the virtual portfolio by the at least one computer processor, comprising at least one of buying or selling the financial objects, according to changes in said index over time.

4. The system of claim 3, further comprising:

a plurality of virtual portfolios of the financial objects with separate lots owned by one or more individual investors,

wherein the financial object comprises at least one of;

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets, a portfolio of assets tracking an index, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund;

a computer-implemented lot matrix database accessible by the at least one computer processor associating a plurality of lots with said plurality of virtual portfolios each lot of said plurality of lots tradable regardless of an initiator of purchase of said lot; and

a memory coupled to the at least one computer processor and having program instructions stored therein, the at least one computer processor programmed to execute said program instructions, said program instructions comprising;

lot selection rules comprising investment management rules comprising at least one of;

coordinating trades, enforcing compliance with policy, or preventing offsetting trades comprising avoiding both purchasing and selling the same lot; and

instructions for receiving one or more requested trades; and

for each of said plurality of virtual portfolios, for performing the following;

for said requested trade;

said system operative to select a lot from said plurality of lots for execution of said requested trade using said lot selection rules, and said lot matrix database;

instructions for purchasing the plurality of virtual portfolios of the financial objects by the at least one computer processor using said investments, wherein the plurality of virtual portfolios purchased according to an index which is constructed without influence of a price of the financial objects, said index constructed by a construction method comprising;

instructions for receiving investments by the one or more investors;

instructions being for purchasing the plurality of virtual portfolios of the financial objects by the at least one computer processor using said investments, wherein the plurality of virtual portfolios of the financial objects is purchased according to an index which is constructed without influence of prices of the financial objects, said index constructed by a construction method comprising;

i) determining by the at least one computer processor, at least one selection rule, and at least one weighting rule;

ii) receiving by the at least one computer processor, data by a computer comprising;

receiving by the at least one computer processor, data regarding publicly traded financial objects,

receiving by the at least one computer processor, data regarding a plurality of entities, each associated with the publicly traded financial objects, and

receiving by the at least one computer processor, data regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) selecting by the at least one computer processor, constituent selected financial objects of said index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) weighting by the at least one computer processor, said constituent selected financial objects of said index to obtain constituent weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

instructions for altering the plurality of virtual portfolios by the at least one computer processor, comprising at least one of buying or selling the financial objects, according to changes in said index over time.

5. A computer-implemented method of managing a portfolio of one or more financial objects the method being executed by at least one computer, the method comprising:

a) managing the portfolio of the financial objects by at least one computer, the financial objects owned by one or more investors;

b) receiving by the at least one computer, investments by the one or more investors;

wherein said managing comprises;

managing a virtual portfolio of the financial objects by the at least one computer wherein said virtual portfolio comprises a collection of the financial objects managed collectively but tracked separately with separately owned lots on behalf of the one or more investors;

providing, receiving or accessing a computer database associating by the at least one computer a plurality of lots owned by each of said one or more investors and associating by the at least one computer said plurality of lots as tradable regardless of an initiator of the purchase of said plurality of lots;

providing, receiving or accessing by the at least one computer, lot selection rules;

receiving by the at least one computer a requested trade;

selecting by the at least one computer a lot for trading from said plurality of lots using said computer database, said lot selection rules, and said requested trade;

providing, receiving or accessing by the at least one computer, taxation rules;

determining by the at least one computer if a trade using said selected lot should be deferred using the computer database and said taxation rules;

generating by the at least one computer a deferred trade in a tax-managed sub-account if it is determined that said requested trade should be deferred; and

selecting by the at least one computer said deferred trade in said tax-managed sub-account for execution if it is determined that said deferred trade should no longer be deferred using said computer database and said taxation rules;

c) purchasing the portfolio of the financial objects by the at least one computer using said investments, wherein the portfolio of the financial objects is purchased according to an index of financial objects which is constructed without influence of prices of the financial objects, said index constructed by a construction method comprising;

i) determining by the at least one computer at least one selection rule, and at least one weighting rule;

ii) receiving data by the at least one computer comprising;

receiving by the at least one computer, data regarding publicly traded financial objects,

receiving by the at least one computer data, regarding a plurality of entities, each associated with the publicly traded financial objects, and

receiving by the at least one computer data, regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) selecting by the at least one computer, constituent selected financial objects of said index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) weighting by the at least one computer, said constituent selected financial objects of said index to obtain constituent weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

d) altering the portfolio by the at least one computer, comprising at least one of buying new financial objects for the portfolio or selling current financial objects in the portfolio, according to changes in said index over time,

wherein said changes in said index over time are determined according to an altering method yielding an altered index, the altering method comprising;

i) receiving new data by the at least one computer comprising;

receiving by the at least one computer, new data regarding the publicly traded financial objects,

receiving by the at least one computer, new data regarding the plurality of entities, each associated with the publicly traded financial objects, and

receiving by the at least one computer, new data regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) re-selecting by the at least one computer, constituent selected financial objects of said altered index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said re-selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) re-weighting by the at least one computer, said constituent selected financial objects of said altered index to obtain constituent re-weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects of said altered index as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects of said altered index,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said re-weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

v) determining by the at least one computer, said new financial objects of the portfolio to purchase based on said altered index; and

vi) determining by the at least one computer, said current financial objects of the portfolio to sell based on said altered index.

6. The computer-implemented method of claim 5, wherein the financial object comprises at least one of:

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets tracking an index, a portfolio of assets, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund.

7. A system for managing a portfolio of one or more financial objects the system comprising:

means for managing the portfolio of the financial objects by at least one computer, the financial objects owned by one or more investors;

means for receiving by the at least one computer, investments by the one or more investors;

wherein said means for managing comprises;

means for managing a virtual portfolio of the financial objects by the at least one computer wherein said virtual portfolio comprises a collection of the financial objects managed collectively but tracked separately with separately owned lots on behalf of the one or more investors;

a computer database comprising means for associating by the at least one computer a plurality of lots owned by each of said one or more investors and associating by the at least one computer said plurality of lots as tradable regardless of an initiator of the purchase of said plurality of lots;

means for providing, receiving or accessing by the at least one computer, lot selection rules;

means for receiving by the at least one computer a requested trade;

means for selecting by the at least one computer a lot for trading from said plurality of lots using said computer database, said lot selection rules, and said requested trade;

means for providing, receiving or accessing by the at least one computer, taxation rules;

means for determining by the at least one computer if a trade using said selected lot should be deferred using the computer database and said taxation rules;

means for generating by the at least one computer a deferred trade in a tax-managed sub-account if it is determined that said requested trade should be deferred; and

means for selecting by the at least one computer said deferred trade in said tax-managed sub-account for execution if it is determined that said deferred trade should no longer be deferred using said computer database and said taxation rules;

means for purchasing the portfolio of the financial objects by the at least one computer using said investments, wherein the portfolio of the financial objects is purchased according to an index of financial objects which is constructed without influence of prices of the financial objects, said index constructed by a construction method comprising;

means for determining by the at least one computer at least one selection rule, and at least one weighting rule;

means for receiving data by the at least one computer comprising;

means for receiving by the at least one computer, data regarding publicly traded financial objects,

means for receiving by the at least one computer data, regarding a plurality of entities, each associated with the publicly traded financial objects, and

means for receiving by the at least one computer data, regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

means for selecting by the at least one computer, constituent selected financial objects of said index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

means for weighting by the at least one computer, said constituent selected financial objects of said index to obtain constituent weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

means for altering the portfolio by the at least one computer, comprising at least one of buying new financial objects for the portfolio or selling current financial objects in the portfolio, according to changes in said index over time,

wherein said changes in said index over time are determined according to an altering method yielding an altered index, the altering method comprising;

means for receiving new data by the at least one computer comprising;

means for receiving by the at least one computer, new data regarding the publicly traded financial objects,

means for receiving by the at least one computer, new data regarding the plurality of entities, each associated with the publicly traded financial objects, and

means for receiving by the at least one computer, new data regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

means for re-selecting by the at least one computer, constituent selected financial objects of said altered index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said re-selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

means for re-weighting by the at least one computer, said constituent selected financial objects of said altered index to obtain constituent re-weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects of said altered index as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects of said altered index,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said re-weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

means for determining by the at least one computer, said new financial objects of the portfolio to purchase based on said altered index; and

means for determining by the at least one computer, said current financial objects of the portfolio to sell based on said altered index.

8. The system of claim 7, wherein the financial object comprises at least one of:

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets tracking an index, a portfolio of assets, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund.

9. A computer program product embodied on a computer accessible medium, the computer program product when executed on at least one processor executes a method of managing a portfolio of one or more financial objects the method being executed by at least one computer, the method comprising:

a) managing the portfolio of the financial objects by at least one computer, the financial objects owned by one or more investors;

b) receiving by the at least one computer, investments by the one or more investors;

wherein said managing comprises;

managing a virtual portfolio of the financial objects by the at least one computer wherein said virtual portfolio comprises a collection of the financial objects managed collectively but tracked separately with separately owned lots on behalf of the one or more investors;

providing, receiving or accessing a computer database associating by the at least one computer a plurality of lots owned by each of said one or more investors and associating by the at least one computer said plurality of lots as tradable regardless of an initiator of the purchase of said plurality of lots;

providing, receiving or accessing by the at least one computer, lot selection rules;

receiving by the at least one computer a requested trade;

selecting by the at least one computer a lot for trading from said plurality of lots using said computer database, said lot selection rules, and said requested trade;

providing, receiving or accessing by the at least one computer, taxation rules;

determining by the at least one computer if a trade using said selected lot should be deferred using the computer database and said taxation rules;

generating by the at least one computer a deferred trade in a tax-managed sub-account if it is determined that said requested trade should be deferred; and

selecting by the at least one computer said deferred trade in said tax-managed sub-account for execution if it is determined that said deferred trade should no longer be deferred using said computer database and said taxation rules;

c) purchasing the portfolio of the financial objects by the at least one computer using said investments, wherein the portfolio of the financial objects is purchased according to an index of financial objects which is constructed without influence of prices of the financial objects, said index constructed by a construction method comprising;

i) determining by the at least one computer at least one selection rule, and at least one weighting rule;

ii) receiving data by the at least one computer comprising;

receiving by the at least one computer, data regarding publicly traded financial objects,

receiving by the at least one computer data, regarding a plurality of entities, each associated with the publicly traded financial objects, and

receiving by the at least one computer data, regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) selecting by the at least one computer, constituent selected financial objects of said index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) weighting by the at least one computer, said constituent selected financial objects of said index to obtain constituent weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

d) altering the portfolio by the at least one computer, comprising at least one of buying new financial objects for the portfolio or selling current financial objects in the portfolio, according to changes in said index over time,

wherein said changes in said index over time are determined according to an altering method yielding an altered index, the altering method comprising;

i) receiving new data by the at least one computer comprising;

receiving by the at least one computer, new data regarding the publicly traded financial objects,

receiving by the at least one computer, new data regarding the plurality of entities, each associated with the publicly traded financial objects, and

receiving by the at least one computer, new data regarding at least one accounting data about the plurality of entities,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends;

iii) re-selecting by the at least one computer, constituent selected financial objects of said altered index based upon said at least one selection rule comprising said at least one accounting data about each of the entities associated with the publicly traded financial objects,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said re-selecting is exclusive of both a market price of the financial object and a market capitalization of the entity associated with the financial object; and

iv) re-weighting by the at least one computer, said constituent selected financial objects of said altered index to obtain constituent re-weightings based upon said at least one weighting rule comprising weighting said constituent selected financial objects of said altered index as a function of at least one accounting data regarding the entities associated with said constituent selected financial objects of said altered index,

wherein said at least one accounting data comprises at least one of;

data found within an annual report, data found within a generally accepted accounting principles (GAAP) annual report, data found within a standard U.S. GAAP company annual report and accounts (GAAP reports), relative size of profit of an entity, pre-exceptional profits, sales, assets, cash flow, shareholders'"'"' equity, a return on investment of the entity, revenue, book value, cash flow, or any dividends,

wherein said re-weighting is exclusive of a market price of the financial object and is not based on any of equal weighting, weighting in proportion to price of the financial object, or weighting in proportion to market capitalization of the entity associated with the financial object; and

v) determining by the at least one computer, said new financial objects of the portfolio to purchase based on said altered index; and

vi) determining by the at least one computer, said current financial objects of the portfolio to sell based on said altered index.

10. The computer program product of claim 9, wherein the financial object comprises at least one of:

equity, debt, a bond, a stock, a financial instrument, a contract, a security, a derivative contract, a mutual fund, an exchange traded fund (ETF), a fund of funds, an index fund, a passive index fund, an enhanced index fund, an actively managed fund, a non-capitalization weighted index fund, a capitalization weighted index fund, an equal weighted indexed fund, an international fund, a sector fund, an asset, a liability, an accounting data based index (ADBI) fund, a portfolio of assets tracking an index, a portfolio of assets, a portfolio of assets tracking at least one of S&

P indexes, FTSE indexes, Russell indexes, Dow Jones indexes, Morgan Stanley indexes, Lehman indexes, Wilshire indexes, composite indexes, international indexes, or Morgan Stanley Capital International indexes, a portfolio of assets tracking an ADBI weighted index, a commodity, an option, a derivative trade, a long hedge, a short hedge, a swap, a futures contract, or a hedge fund.