Patent ID: 8301538

Claim:
A method for selecting and weighting securities for an actively managed exchange-traded fund using a computer system, comprising the steps of: (1) inputting information of an initial selection of securities into a database, wherein the information comprises identity, growth data, and value data of each stock in the initial selection of securities as of a selection date, wherein the initial selection of securities consists of one of domestic stocks and international stocks, and wherein the initial selection of securities is selected based at least in part on market capitalization; (2) processing data in said database for scoring each of the stocks in said database using a plurality of growth and value factors to generate one or more growth scores and one or more value scores for each stock including: (i) assigning a growth rank to each stock for each growth factor; (ii) assigning a value rank to each stock for each value factor; (iii) summing up all growth ranks of each stock to generate a raw growth score for each stock; (iv) ranking the stocks based on raw growth scores; (v) summing up all value ranks of each stock to generate a raw value score for each stock; and (vi) ranking the stocks based on raw value scores; (3) processing data in said database for determining a selection score for each stock including: setting the selection score of each stock equal to the better of a final growth score and a final value score, wherein the final growth scores are based on the raw growth score ranks and a quantitative style overlay, and wherein the final value scores are based on the raw value score ranks and the quantitative style overlay; (4) processing data in said database for ranking the stocks in the initial selection of securities based at least in part on the selection scores; (5) processing data in said database for eliminating a predetermined amount of the lowest ranking stocks; (6) processing data in said database for dividing the remaining stocks into a plurality of sub-groups; (7) processing data in said database for generating a stock portfolio by weighting the remaining stocks according to the sub-groups they are in, wherein each stock is equally weighted within its sub-group; and (8) offering an exchange-traded fund to consumers based on the stock portfolio; wherein at least one of steps (2)-(8) is performed by the computer system.