Method And System For Generating An Index Of Securities

Abstract

A method for generating an index of securities includes selecting index constituents and weighing the selected index constituents by a measure (“an intangible asset measure”) of quality and/or value of the intangible assets of constituent entities. The index constituents can be selected from a set of potential constituents based on an intangible asset measure of each constituent in the set, and the selected index constituents may then be weighted by a desired measure or methodology or weighted equally, or by an intangible asset measure. Another method for generating an index of securities includes combining groups of constituents, which are selected based on an intangible asset measure, to be index constituents and weighing the index constituents by a desired measure or methodology. The groups of constituents may be stocks of existing indices having assigned weights in the existing indices based on intangible asset measures of the stocks. These assigned weights of the stocks may be used in a calculation of the weights of the index constituents which correspond to these stocks.

Description

BACKGROUND OF THE INVENTION[0001]1. Field of the Invention[0002]The present invention relates generally to methods and systems for generating an index of securities, and more particularly, to a method and system for generating an index of securities whose index constituents are selected and / or weighted by measures of quality or value of the intangible assets of the constituent entities. The present invention also relates to asset management and the application of the methods and systems for generating an index of securities as described herein.[0003]2. Background Art[0004]Indices have been used by investors as market indicators and for constructing investment portfolios, funds, or other products and services linked to one or more indices. Conventional security indices do not evaluate a company's intangible assets and may overemphasize the importance of tangible assets. As the economy has transformed from a manufacturing base manned by laborers to a service base driven by knowledge w...

AI Technical Summary

Benefits of technology

[0009]The present invention provides a method and system for investors to capitalize on the rewards of innovation and technology by investing in intellectual capital equity. As investors make well-grounded assessments about the value of a company's innovation and technology—the intangible value of a company—it may give them the competitive advantage in the marketplace to produce a higher returning and / or reduced risk portfolio. For example, investors may produce a portfolio which consists of the stocks (or other securities) of companies that own valuable patents, which can serve as a proxy for intellectual capital value. A portfolio based on intellectual capital value would allow investors to commit a sustainable and meaningful portion of their assets to a leading asset class of the knowledge economy.

Problems solved by technology

Conventional security indices do not evaluate a company's intangible assets and may overemphasize the importance of tangible assets.

Traditional measurements used by investors fail to fully capture the extent of the transformation to the predominance of intangible assets over tangible assets.

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