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). Two related Indexes - the Ocean Tomo 300® Patent Growth Index (NYSE Euronext: OTPATG) and the Ocean Tomo 300® Patent Value Index (NYSE Euronext: OTPATV) - complete the suite of Indexes.
The OT300 was recognized by the Exchange as "the first major, broad-based market equity index to be launched in 35 years, following 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."
Despite 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 80% of corporate value reflected in the S&P® 500 was tangible assets, while intangible assets comprised less than 20% of market capitalization.
Today, the ratio of tangible to intangible assets has inverted - nearly 80% of corporate value resided in intangible assets. The OT300 provides a much-needed market benchmark for the U.S. economy of the 21st century.
The Ocean Tomo 300 is constructed to be evenly balanced across market capitalization and style boxes. It has an average and median market capitalization of $13.5 million and $3.5 million respectively. While large cap, mid cap, and small cap securities account for 25%, 40%, and 35% of the number of securities in the index, they account for 83%, 14.5%, and 2.5% of the weight of the index by market cap respectively.The sectors with the greatest percentage of stocks in the index are Information Technology, Healthcare, and Industrials with 42%, 20% and 12% respectively. The sectors with the greatest weight in the index is Information Technology, Industrials, and Healthcare with 38%, 16%, and 12% respectively.
From its inception in January 2007 through October 31, 2012, the OT300 outperformed the S&P® 500 by 635 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 three 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.
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