CHICAGO — Ocean Tomo LLC introduced an investible intellectual-capital stock index called the Ocean Tomo 300 Patent index.
The index, based on the value of corporate intellectual capital, consists of companies based around the globe that trade on U.S. markets and own U.S. patents for valuable innovations and technologies, said Keith Cardoza, managing director of the Chicago-based company.
"It's meant to be a broad-based diversified index," said Mr. Cardoza, its creator. "It is the first index that represents the knowledge economy we are in."
Mr. Cardoza joined Ocean Tomo, a merchant banking and private equity firm specializing in services related to intellectual capital, in 2005 from Boeing Co., Chicago. He had been director-investments and chair of Boeing's investment strategy and asset allocation committee, coordinating a team that oversaw the company's then-$41 billion pension fund and $24 billion 401(k) plan.
Ocean Tomo is seeking to interest pension funds, money managers and other institutional investors in creating index funds and active strategies based on the index, Mr. Cardoza said.
Claymore Securities Inc., Lisle, Ill., is seeking to launch an exchange-traded fund that would track the Ocean Tomo 300 Patent index, said David Cohen, managing director—new product engineering at Claymore. The ETF is pending approval from the Securities and Exchange Commission, Washington.
The American Stock Exchange is pricing and publishing the new index, which has a market capitalization of $7 trillion and offers breakouts into growth and value style subindexes and large-cap and small-cap size subindexes, Mr. Cardoza said.
In developing and maintaining the index, Ocean Tomo uses its own internally developed and patented approach called Patent
Ratings to analyze 4 million U.S. patents dating to 1983. The process assigns patents to 4,300 global companies and assess the value of the patents to the companies, Mr. Cardoza said.
The 300 stocks in the index have the highest patent value relative to their tangible book value, said Mr. Cardoza.
"Intellectual property is clearly an attractive asset class," Mr. Cardoza said, adding that he considers it a separate asset class.
In a back-test for the 10 years ended Sept. 30, the Ocean Tomo 300 Patent index returned an annualized 11.69%, compared with the Standard & Poor's 500 annualized return of 8.59%, he said. The Ocean Tomo index has the same beta as the S&P 500, he said.
For Ocean Tomo, the new index is its first of what could be more indexes.
In 2007, the firm plans to introduce a global stock index based on brands and a global stock index based on copyrights, Mr. Cardoza said.
Both brands and copyrights are forms of intellectual capital and in keeping with Ocean Tomo's expertise, Mr. Cardoza noted.
