There is a new exchange traded fund (ETF) that is testing a new investment strategy. The Ocean Tomo Patent 300 (OTP) is a Claymore product that is a possible proxy for large-cap growth. Roger Nusbaum of The Street.com believes that as the U.S. economy has evolved, there is more economic value to be derived from intangible assets, like patents, instead of tangibles, like plants and equipment.
Using back testing, over the past decade, the patent weighting has averaged 3 percentage points better returns annually over the S&P 500, with a 92% correlation to the index. The method is to assess the economic value of a company’s patent portfolio and rank it with other companies. The world of companies used is the 1,000 most-liquid stocks, which creates a tilt to large-cap. Trading has been going on only a few days so give it a little time.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.