Methods for asset index tracking

US7689493B1 · kind B1 · utility

Assignee

• Merrill Lynch & Co., Inc. · US

Inventors

• Michael Sullivan · Woodstock, US
• Philip FISCHER · Chapel Hill, US
• Philip Galdi · Orangeburg, US
• David H. Shen · Saratoga, US

Key dates

• Filing date: Nov 10, 2006
• Grant date: Mar 30, 2010
• Expiry date: Dec 31, 2027

Classification

• Technology area (CPC G): Physics
• CPC primary: G06Q40/06
• WIPO field: IT methods for management
• WIPO sector: Electrical engineering

Abstract

The disclosure details the implementation of apparatuses, methods, and systems for asset index tracking. The disclosure details how an asset index tracker aligns investor asset portfolios to a selected asset index. The asset index tracker enables investors to automatically match their portfolio to a predefined index. The asset index tracker compares the investor's portfolio to the selected index and provides recommendations to rebalance the portfolio at specified intervals. This is achieved by comparing the investor's portfolio to the index to determine the trades necessary to align the portfolio to the index. A correlation and estimated tracking error of the portfolio to the index may be calculated to validate how the portfolio matches the index. The resulting trade recommendations may be executed upon the investor's approval or automatically. The execution of the trades achieves the rebalancing of the investor's portfolio to more closely track a selected target index.