Unitary investment having interrelated assets

• US 7,860,779 B2
• Filed: 11/12/2004
• Issued: 12/28/2010
• Est. Priority Date: 03/12/1999
• Status: Expired due to Fees

• Current Assignee: Alpha Financial Technologies LLC
• Original Assignee: Alpha Financial Technologies LLC
• Inventors: Sperandeo, Victor
• Primary Examiner(s): Kramer; James A
• Assistant Examiner(s): Vezeris; James A
• Application Number:
  US10/987,585
• Publication Number:
  US 20050108139A1
• Time in Patent Office: 2,237 Days
• Field of Search: 705/36.R, 705/35, 705/37
• US Class Current: 705/37
• 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

The present invention provides a unitary note investment instrument and method of use that has two performance components. An investor invests in the issuer the principal amount of the investment. The first component is a base portfolio. The second component is keyed to a passive commodity index, having long and short positions. The instrument'"'"'s commodity index exposure is established as the product of a leverage factor of at least 100% and the amount of the base portfolio exposure. The return to the investor comprises the change in value of both the base portfolio exposure and the commodity index exposure over a predetermined period of time multiplied by a payout factor.

Claims

1. A computer implemented investment system comprising:

a processor and a memory, wherein the memory contains computer readable instructions which cause the processor to create, monitor and calculate a return for an investment product; and

the investment product comprising;

a predetermined time period for holding the investment product,

a base portfolio of assets having a base portfolio exposure,

a leverage portfolio comprising a passive commodity index portfolio, of long and short positions, having a passive commodity index portfolio exposure in an amount substantially equal to the base portfolio exposure multiplied by a leverage factor of at least 100%,

wherein the base portfolio combined with the leverage portfolio that reduces the risk while increasing the return of the investment product as compared to the base portfolio alone, and

the return comprising substantially the change in value of the base portfolio exposure and the passive commodity index portfolio exposure over the predetermined time period.

2. The computer implemented investment system as recited in claim 1, wherein the investment product further comprises a collateral deposit.

3. The computer implemented investment system as recited in claim 2 wherein the base portfolio exposure is substantially equal in value to the collateral deposit.

4. The computer implemented investment system as recited in claim 2 wherein the base portfolio of assets has a notional component, and wherein the value of the base portfolio exposure is greater than the value of the collateral deposit.

5. The computer implemented investment system as recited in claim 1, wherein the investment product further comprises:

a rebalanced base portfolio of assets having an exposure in an amount substantially equal to the sum of the base portfolio exposure and the changes in value of the base portfolio exposure and of the passive commodity index portfolio exposure; and

a releveraged passive commodity index portfolio, of long and short positions, having an exposure in an amount substantially equal to the product of the rebalanced base portfolio exposure multiplied by a second leverage factor.

6. The computer implemented investment system as recited in claim 5 wherein the second leverage factor is a function of the performance of the passive commodity index portfolio over a selected period of time.

9. The computer implemented investment system as recited in claim 1, wherein the investment product further comprises:

a rebalanced base portfolio exposure to replace the base portfolio exposure; and

a releveraged passive commodity index portfolio exposure, of long and short, positions, to replace the passive commodity index portfolio exposure.

10. The computer implemented investment system as recited in claim 1 wherein the base portfolio is keyed to an equity index.

11. The computer implemented investment system as recited in claim 10 wherein the equity index comprises the S &

P 500 Stock Index.

12. The computer implemented investment system as recited in claim 1 wherein the base portfolio comprises a pre-existing portfolio held by the investor.

13. The computer implemented investment system product as recited in claim 12 wherein the base portfolio comprises stocks, bonds, T-bills, cash, currencies, mortgages, any other security, or a combination thereof.

14. The computer implemented investment system as recited in claim 1 wherein the passive commodity index portfolio is keyed to the S&

P Diversified Trends Indicator.

15. The computer implemented investment system as recited in claim 1 wherein the passive commodity index portfolio includes bonds and currencies.

16. The computer implemented investment system as recited in claim 1 wherein the leverage factor is a function of the performance of the passive commodity index portfolio over a selected period of time.

17. The computer implemented investment system as recited in claim 1 wherein the leverage factor is a first predetermined number if the passive commodity index portfolio has had an actual return that is equal or greater than a specified return over a selected period of time and a second predetermined number if the passive commodity index portfolio has had the actual return that is less than the specified return said the selected period of time.

18. The computer implemented investment system as recited in claim 17 wherein the first predetermined number is 300% and the second predetermined number is 150%.

19. The computer implemented investment system as recited in claim 17, wherein the first predetermined number is at least 100% and the second predetermined number is greater than the first predetermined number.

20. The computer implemented investment system as recited in claim 1 wherein the leverage factor is less than or equal to 150%.

21. The computer implemented investment system as recited in claim 1 wherein the leverage factor is less than or equal to 300%.

7. The computer implemented investment system as recited in claim, wherein the investment product further comprises a loss limitation which limits the maximum loss an investor can incur as a result of a change in value of the passive commodity index portfolio exposure.

8. The computer implemented investment system as recited in claim 7 wherein the loss limitation is a put option.

22. A computer adapted to manage an investment product comprising:

a computer;

data stored on the computer that corresponds to the investment product;

the computer implemented investment product comprising (a) predetermined time period for holding the investment, (b) a base portfolio of assets having a base portfolio exposure, (c) a leverage portfolio comprising a passive commodity index portfolio, of long and short positions, having a passive commodity index portfolio exposure in an amount substantially equal to the base portfolio exposure multiplied by a leverage factor of at least 100%, and (d) a return comprising substantially the change in value of the base portfolio exposure and the passive commodity index portfolio exposure over the predetermined time period;

wherein the base portfolio combined with the leverage portfolio reduces the risk while increasing the return of the investment product as compared to the base portfolio alone;

wherein the computer monitors the base portfolio and the passive commodity index portfolio, calculates the return and provides the return to an investor.