Financial Instrument Selection and Weighting System and Method
a financial instrument and weighting technology, applied in the field of financial instrument weighting system and selection method, can solve the problems of not providing, several strategies for maximizing profit in an open trading forum have not been exploited, and the complexity of securities brokering has become ever more complex
Inactive Publication Date: 2012-06-28
WISDOMTREE INVESTMENTS INC
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Benefits of technology
"The present invention is a financial instrument made up of securities that meet certain selection criteria. The instrument can take the form of an index or a fund that contains a combination of securities. The securities can include common stock, real estate investment trusts, tracking stocks, and so forth. The instrument is weighted based on the characteristics of each security, such as market capitalization and cash dividends. The weighting percentage for each security is calculated based on its own characteristics and the characteristics of other securities in the instrument. The instrument can also be derived from a previously-devised primary instrument by selecting and weighting a subset of the securities. The invention provides a method for selecting and weighting securities for inclusion in a financial instrument. The technical effects of the invention include improved diversification and improved risk-adjusted returns."
Problems solved by technology
Ever since the first stocks were traded on Wall Street in the 1700s, securities brokering has become ever more complicated.
Thus, several strategies for maximizing profit in an open trading forum have not been exploited.
Further, the creation and tracking of financial instruments often does not take dividend payments into account, or does not provide a benchmark to measure the relative value of dividend-paying securities.
Method used
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Embodiment Construction
[0020]Generally, one embodiment of the present invention takes the form of an index or (other financial instrument) made of at least two securities. The securities are weighted by some form of fundamental data, such as revenue (also referred to as “sales”) or dividends paid on the security. “Weighting” generally refers to determining an amount of a security to be held in the index by, for example, specifying the relative importance of a security based on a given variable. For example, in a stock-based, market-capitalization weighted index, each included stock affects the index in proportion to the number of shares of the stock outstanding multiplied by the stock's price.
[0021]For reference, the term “index” generally refers to a statistical indicator which provides a representation of the value of the securities which constitute the indicator. Indices may, for example, serve as barometers for a given market or industry and benchmarks against which financial or economic performance i...
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A financial instrument formed by selecting and weighting securities according to selection and weighting criteria. A primary index may be constructed from a universe of securities meeting at least one selection criterion, and may optionally be weighted according to a selection criterion. Derivative indices may be constructed from the primary index. The derivative indices may be further screened and / or weighted according to the same or different selection criteria. Derivative indices may also be created from other derivative indices, again based on selection and / or weighting criteria. The primary index and any derivative indices may be ranked according to one or more selection criteria, either before or after derivative indices are constructed.
Description
CROSS-REFERENCE TO RELATED APPLICATIONS[0001]This application is a continuation of U.S. patent application Ser. No. 11 / 062,033, entitled “FINANCIAL INSTRUMENT SELECTION AND WEIGHTING SYSTEM AND METHOD,” and filed Feb. 18, 2005, which is a continuation-in-part of U.S. patent application Ser. No. 11 / 001,894, entitled “FINANCIAL INSTRUMENT WEIGHTING SYSTEM AND METHOD,” and filed on Dec. 1, 2004, both of which are incorporated by reference herein in their entireties as if fully set forth herein.BACKGROUND OF THE INVENTION[0002]1. Technical Field[0003]This invention relates generally to a method and system for selecting weighting components of a financial instrument, and more specifically to methods and apparatuses for selecting and weighting components of a financial instrument by revenue or dividends.[0004]2. Discussion of Background Art[0005]Ever since the first stocks were traded on Wall Street in the 1700s, securities brokering has become ever more complicated. The rise of the New Y...
Claims
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IPC IPC(8): G06Q40/06
CPCG06Q40/06
Inventor STEINBERG, JONATHAN L.SIRACUSANO, III, LUCIANO
Owner WISDOMTREE INVESTMENTS INC