Ocean Tomo 300®
Patent Index
6,456.86
(-34.09 | -0.53%)
close 5/9/2008
(AMEX: OTPAT)
Patent Index
6,456.86
(-34.09 | -0.53%)
close 5/9/2008
(AMEX: OTPAT)
Ocean Tomo 300® Patent Index
The Ocean Tomo 300® Patent Index (OT300) is the industry’s first index based on the value of intellectual property, and represents a diversified portfolio of 300 companies that own the most valuable patents relative to their book value. The Index is priced and published by the American Stock Exchange® (AMEX: OTPAT).
The OT300 was recognized by the American Stock Exchange as “the first major, broad-based market equity index to be launched in 35 years, and follows the progression from the Dow Jones Industrial Average in 1896, to the Standard & Poor’s 500 in 1957 and then to the NASDAQ Composite Index in 1971.”
In spite of their familiarity, historical market indices have not adapted to current market realities. In the past quarter century, a large and striking macroeconomic value inversion has occurred. As shown in the chart below, in 1975 more than eighty percent of corporate value reflected in the S&P® 500 was tangible assets, while intangible assets comprised less than twenty percent of market capitalization. Today, the ratio of tangible to intangible assets has inverted – nearly eighty percent of corporate value resides in intangible assets. The OT300 provides a much-needed market benchmark for the U.S. economy of the 21st century.
Performance
In the eleven months from inception through September 30, 2007, the OT300 returned 20.6%, outperforming the S&P® 500 by more than 875 basis points. This performance record is auspicious and attests to the relevance of the OT300 as the natural benchmark for the U.S. economy. The OT300’s performance in its first year also speaks to the importance of objectively valuing patents owned by publicly traded companies to provide a fuller, more accurate picture of corporate health. In a 10-year backtest, the OT300 would have outperformed the S&P® 500 by more than 300 basis points annualized.
Index Construction
Potential OT300 constituents include all equities trading on major U.S. exchanges that are among the 1,000 most liquid securities. The potential constituents are then narrowed to a universe of companies that own patents. The patent-owning companies are divided into 50 style and size groups and ranked by their Innovation Ratios, i.e. patent value divided by book value where patent value is assessed by Ocean Tomo’s PatentRatings® system. Each group contains an approximately equal number of patent-owning companies. The securities in each group are ranked using a 100% rules-based methodology that identifies those securities with the greatest patent value relative to book value, while maintaining broad-based diversification. The six highest ranking securities in each of the 50 groups are selected (resulting in a total of 300 securities) and then weighted by market capitalization.
Investable Products
The Ocean Tomo 300® Patent Index and the Ocean Tomo 300® Patent Growth Index underlie two ETFs, respectively: the Claymore/Ocean Tomo Patent ETF (AMEX: OTP) and the Claymore/Ocean Tomo Growth Index ETF (AMEX: OTR). Claymore Advisors, LLC acts as Investment Adviser on both funds.
Over the last thirty years the industrial economy has transitioned to become the knowledge economy. Intellectual capital has emerged as the leading asset class. In 1975, more than 80% of the market’s value was composed of tangible assets: factories, machines, and inventory. Now in 2007, less than 20% of the market’s value is composed of tangible assets, replaced by intangible assets and led by intellectual property.
Patent Index Constituent Companies
Browse Constituent Company Dashboards by Name:
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Research
Investment Professionals
The Ocean Tomo 300® Patent Index (OT300) is the industry’s first index based on the value of intellectual property, and represents a diversified portfolio of 300 companies that own the most valuable patents relative to their book value. The Index is priced and published by the American Stock Exchange® (AMEX: OTPAT). The OT300 was recognized by the American Stock Exchange as “the first major, broad-based market equity index to be launched in 35 years, and follows the progression from the Dow Jones Industrial Average in 1896, to the Standard & Poor’s 500 in 1957 and then to the NASDAQ Composite Index in 1971.”
In spite of their familiarity, historical market indices have not adapted to current market realities. In the past quarter century, a large and striking macroeconomic value inversion has occurred. As shown in the chart below, in 1975 more than eighty percent of corporate value reflected in the S&P® 500 was tangible assets, while intangible assets comprised less than twenty percent of market capitalization. Today, the ratio of tangible to intangible assets has inverted – nearly eighty percent of corporate value resides in intangible assets. The OT300 provides a much-needed market benchmark for the U.S. economy of the 21st century.
Performance
In the eleven months from inception through September 30, 2007, the OT300 returned 20.6%, outperforming the S&P® 500 by more than 875 basis points. This performance record is auspicious and attests to the relevance of the OT300 as the natural benchmark for the U.S. economy. The OT300’s performance in its first year also speaks to the importance of objectively valuing patents owned by publicly traded companies to provide a fuller, more accurate picture of corporate health. In a 10-year backtest, the OT300 would have outperformed the S&P® 500 by more than 300 basis points annualized.
11-Month Performance
10-Year Backtest
10-Year Backtest
Index Construction
Potential OT300 constituents include all equities trading on major U.S. exchanges that are among the 1,000 most liquid securities. The potential constituents are then narrowed to a universe of companies that own patents. The patent-owning companies are divided into 50 style and size groups and ranked by their Innovation Ratios, i.e. patent value divided by book value where patent value is assessed by Ocean Tomo’s PatentRatings® system. Each group contains an approximately equal number of patent-owning companies. The securities in each group are ranked using a 100% rules-based methodology that identifies those securities with the greatest patent value relative to book value, while maintaining broad-based diversification. The six highest ranking securities in each of the 50 groups are selected (resulting in a total of 300 securities) and then weighted by market capitalization.
Investable Products
The Ocean Tomo 300® Patent Index and the Ocean Tomo 300® Patent Growth Index underlie two ETFs, respectively: the Claymore/Ocean Tomo Patent ETF (AMEX: OTP) and the Claymore/Ocean Tomo Growth Index ETF (AMEX: OTR). Claymore Advisors, LLC acts as Investment Adviser on both funds.
Over the last thirty years the industrial economy has transitioned to become the knowledge economy. Intellectual capital has emerged as the leading asset class. In 1975, more than 80% of the market’s value was composed of tangible assets: factories, machines, and inventory. Now in 2007, less than 20% of the market’s value is composed of tangible assets, replaced by intangible assets and led by intellectual property.
Patent Index Constituent Companies
Browse Constituent Company Dashboards by Name:
Browse Constituent Company Dashboards by Ticker Symbol:
- 2007 Ocean Tomo 300® Patent Index Constituent List (by company)
- 2007 Ocean Tomo 300® Patent Index Constituent List (by ticker symbol)
- 2007 Ocean Tomo 300® Patent Index Constituent Size & Style Grid
Research
- Ocean Tomo 300® Patent Index Backgrounder
- Ocean Tomo 300® Patent Index Methodology
- Ocean Tomo PatentRatings® System Backgrounder
- Ocean Tomo PatentRatings® System Patent (USP 6,556,992)
- Ocean Tomo Backgrounder
Investment Professionals
| Cameron Gray |
312-327-4403 PH | 312-327-4401 FX |
| Associate | cgray@oceantomo.com | Download v-card | Biography |