Ocean Tomo 300®
Patent Index
4,096.07
(+72.66 | +1.81%)
close 4/21/2009
(NYSE Euronext: OTPAT)
Patent Index
4,096.07
(+72.66 | +1.81%)
close 4/21/2009
(NYSE Euronext: 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 NYSE Euronext (NYSE Euronext: OTPAT).
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 to the right, 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
From inception in November 1, 2006 through November 30, 2008, the OT300 outperformed the S&P® 500 by more than 460 basis points. This performance record is auspicious and confirms the relevance of the OT300 as the natural benchmark for the U.S. economy. The OT300’s performance in its first two years 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 430 basis points annualized. In a global economy driven extensively by intangible assets, these results comport with intuition – companies with strong patent portfolios perform better in bullish and bearish markets alike.
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 (NYSE Euronext: OTP) and the Claymore/Ocean Tomo Growth Index ETF (NYSE Euronext: 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
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 NYSE Euronext (NYSE Euronext: OTPAT). 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 to the right, 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
From inception in November 1, 2006 through November 30, 2008, the OT300 outperformed the S&P® 500 by more than 460 basis points. This performance record is auspicious and confirms the relevance of the OT300 as the natural benchmark for the U.S. economy. The OT300’s performance in its first two years 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 430 basis points annualized. In a global economy driven extensively by intangible assets, these results comport with intuition – companies with strong patent portfolios perform better in bullish and bearish markets alike.
2-Year 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 (NYSE Euronext: OTP) and the Claymore/Ocean Tomo Growth Index ETF (NYSE Euronext: 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
- 2008/2009 Ocean Tomo 300® Patent Index Constituent List (by company)
- 2008/2009 Ocean Tomo 300® Patent Index Constituent List (by ticker symbol)
- 2008/2009 Ocean Tomo 300® Patent Index Constituent List (size and style grid)
Browse Constituent Company Dashboards by Name
Browse Constituent Company Dashboards by Ticker Symbol
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)
- Patent Attribution to Equity Returns - James E. Malackowski & Jonathan A. Barney
Investment Professionals
| Michael D. Friedman | 312-327-4428 | 312-327-4401 FX |
| Managing Director | mfriedman@oceantomo.com | Download v-card | Biography |