Patent Document

This application is a continuation of U.S. patent application Ser. No. 11/936,172, filed Nov. 7, 2007, now U.S. Pat. No. 8,095,446, the content of which is hereby incorporated by reference herein in its entirety into this disclosure. 
    
    
     BACKGROUND OF THE INVENTION 
     1. Field of the Invention 
     The present invention relates to controlling portfolios. More particularly, the present invention relates to automatically allocating, rebalancing and transferring funds between mutual funds and portfolios based upon predetermined criteria. 
     2. Background of the Invention 
     A mutual fund is a managed form of collective investments that pools money from many investors and invests it into portfolios composed primarily of stocks, bonds, short-term money market instruments, or other securities. 
     Most mutual funds&#39; investment portfolios are continually adjusted under the supervision of a professional manager. This manager generally forecasts the future performance of investments appropriate for the fund and chooses those which he or she believes will most closely match the fund&#39;s stated investment objective. This is known as active management. However, other mutual funds mirror established indices such as the S&amp;P 500 and Wilshire 5000. The manager simply invests to replicate the movements of the index, regardless of market conditions. This form of management is known as passive management because the manager usually relies on a computer model with little human input. There is much debate of which style of management yields the best results, with positive and negative attributes on either side. 
     Choosing the “best fit” mutual fund to invest in is complicated. The potential investor should be aware of the risks and performance of each fund, as well as the type of fund. Funds vary substantially in their holdings and goals. Some funds may take on more risk in anticipation of a higher payoff in the future. Other funds focus on a more conservative approach avoiding risk for a more secure and consistent return. Depending on the specific goals of an investor, all criteria should be scrutinized in order to match those goals with a particular fund. Mutual fund growth is often unpredictable. If a fund is invested heavily in one particular area, a sudden change in that market can significantly alter the status of the fund. It is for this reason that mutual fund managers typically diversify the holdings of a mutual fund. Diversification gives the benefit of stability, as a sudden change in one area of the market will not substantially affect the entire fund. 
     One of the important factors for determining in which fund to invest is fund performance. If a particular fund is not performing up to an investor&#39;s expectations, the investor should transfer his assets to a fund that will meet his expectations. In order to minimize the possible loss involved in staying with a fund that has begun to underperform, this transfer should be done as soon as possible. However, constant monitoring of a fund&#39;s performance is beyond the capabilities of the average investor. 
     What is needed is a system or method that can automatically reallocate and rebalance a portfolio based on the pre-determined criteria given by the investor. 
     SUMMARY OF THE INVENTION 
     The present invention is a proprietary computer-based system which allows clients to have their account balances automatically “swept” or otherwise transferred from their current mutual fund (or position) to a new mutual fund (or position) that fits the client&#39;s predetermined criteria. Furthermore, the present invention features a user friendly selection screen in which to create criteria for use in selecting a new fund once a current fund no longer meets user criteria. This computer-based system can be in a remote location, on a network, or the user&#39;s personal computer. Once a transfer of assets is complete, a notification can be sent to the user. 
     In one exemplary embodiment, the present invention is a system for automatically allocating and rebalancing portfolios. The system includes an asset invested in a fund, a fund database having information about a plurality of funds, a computer connected to the fund database, and a user predetermined criteria including a condition that triggers a transfer of the asset from one fund to another on the computer. The computer automatically and without the need for any user intervention transfers the asset from a first fund to a second fund if the condition is satisfied. 
     In another exemplary embodiment, the present invention is a system for automatically allocating and rebalancing portfolios. The system includes a pre-selected fund, a user predetermined criteria prioritized by the user to determine which of a plurality of funds is suitable, a plurality of fund data which is continuously updated and used to determine which of the plurality of funds meets the user defined criteria, and a computer which continuously monitors the pre-selected fund to confirm it complies with the user defined criteria. An automatic transfer of funds is made in the event the fund fails to meet the user predetermined criteria. 
     In yet another exemplary embodiment, the present invention is a method for automatically allocating and rebalancing portfolios. The method includes programming a user predetermined criteria including a condition that triggers a transfer of an asset from a first fund to a second fund on a computer, and transferring the asset from the first fund to the second fund via the computer without any user intervention. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         FIG. 1  shows a system for allocating and rebalancing portfolios according to an exemplary embodiment of the present invention. 
         FIG. 2  shows a user interface and input devices according to an exemplary embodiment of the present invention. 
         FIG. 3  shows a set of inputs and outputs of the application programming interface according to an exemplary embodiment of the present invention. 
         FIG. 4  shows a system for allocating and rebalancing portfolios according to an exemplary embodiment of the present invention. 
         FIG. 5  shows a method of allocating funds according to an exemplary embodiment of the present invention. 
         FIG. 6A  shows an example of a criterion selection screen according to an exemplary embodiment of the present invention. 
         FIG. 6B  shows an example of a criterion selection screen according to an exemplary embodiment of the present invention. 
         FIG. 6C  shows an example of a criterion selection screen according to an exemplary embodiment of the present invention. 
         FIG. 6D  shows an example of a criterion selection screen according to an exemplary embodiment of the present invention. 
         FIG. 7  shows a process of the application interface according to an exemplary embodiment of the present invention. 
         FIG. 8A  shows an example of a user interface according to an exemplary embodiment of the present invention. 
         FIG. 8B  shows an example of a user interface according to an exemplary embodiment of the present invention. 
     
    
    
     DETAILED DESCRIPTION OF THE INVENTION 
     The present invention provides a novel solution to the problems associated with constant monitoring of a fund. In one exemplary embodiment, the present invention is a proprietary computer-based system which allows clients to have their account balances automatically “swept” or otherwise transferred from their current mutual fund (or position) to a new mutual fund (or position) that fits the client&#39;s predetermined criteria. 
     “Computer”, as used herein and throughout this disclosure, refers to any device capable of running a software program and connecting to a network. Examples of computers include but are not limited to: desktop computers, laptop computers, Personal Digital Assistants (PDA&#39;s), mobile telephones, etc. 
     “Asset”, as used herein and throughout this disclosure, refers to any economic value that is potentially or actually an investment. Examples of an asset include but are not limited to: cash, stock shares, mutual fund shares, money market shares, bank accounts, etc. 
     “Fund”, as used herein and throughout this disclosure, refers to any collective investment. Examples of a fund include but are not limited to: a mutual fund, a money market fund, a stock index, a hedge fund, etc. 
     The data from mutual funds are fed into and aggregated into a proprietary application programming interface (API). The clients may then upload their own specific investment criteria parameters into this interface from whichever firm they do their online or institutional banking with. The invention allows for the automatic and seamless movement of client/institutional funds from one mutual fund to another based upon the user&#39;s pre-selected set of parameter(s). 
       FIG. 1  shows an exemplary embodiment of a system for automatically allocating and rebalancing portfolios according to an exemplary embodiment of the present invention. A selection screen  100  is an exemplary embodiment of a user interface where a user  101  sets parameter values and ranks the priority of the parameters. User  101  is connected through a network  114 , such as the internet, to a server  110  which is in connection with a mutual fund database  112 . Server  110  hosts an API  116  that gives clients a set of commands to use when setting parameters. Based on the set parameters, server  110  monitors the selected fund  120  of user  101 . In the event that fund  120  fails to meet the criteria selected by user  101 , server  110  automatically transfers the holdings from fund  120  to another fund  122  that matches the criteria entered by user  101  via server internet connection  110  without any user intervention. 
     For example, in one exemplary embodiment of the invention, a client selects to automatically have its portfolio cash swept to the highest yielding mutual fund available on the platform. This selection could be based upon the previous business day&#39;s closing net yield or any other pre-determined criteria. The transaction is accomplished seamlessly and automatically and without the need for a command, trade or even a keystroke on the part of the account holder. 
       FIG. 2  shows an exemplary embodiment of the user interface of the current invention. In this embodiment, a user  201  selects the investment parameters he desires on a personal computer by opening the selection screen  200  on his personal computer  202 . This selection screen  200 , which will be displayed on the screen  204 , allows the user  201  to select from or enter the desired investment parameters. These parameters are entered into the computer  202  using the mouse  208 , keyboard  206 , or other input device, such as a stylus (not shown) or touchscreen (not shown). The computer  202  then communicates with the modem  209  which in turn communicates with the internet  230  to send the user&#39;s selected parameters to the server. 
       FIG. 3  shows an exemplary embodiment of the application programming interface  316  of the present invention. In this embodiment, a computer with the help of an application programming interface  316  gives clients a set of commands to use when setting investment parameters, such as reading individual fund data from the fund database  312 , and transferring assets from one fund  320  to another fund  322 . These commands are selected from the selection screen  300 . Individual fund data can be current status or historical data including but not limited to: the asset size of the fund, the gross performance of the fund, the net fund performance, or other various rating criteria such as from S&amp;P, Moody&#39;s or other NSRO. With this set of commands, users can program their criteria and preferences. Based on the selection criteria that the user programs and the data received from each of the funds, application programming interface  316  assigns server  310  to transfer funds to the appropriate mutual fund when necessary. A notification  318  may be sent to the fund manager as well as the user. This notification  318  could be in the form of an e-mail, text message, etc. 
       FIG. 4  shows an exemplary embodiment of a system for automatically allocating and rebalancing portfolios. In this embodiment, a selection screen  400  is utilized as a graphical user interface for a computer program. A user  401  sets “If/Then” statements forming fund selection criteria. User  401  has access to a mutual fund database  412  through an API  416 . The API  416  gives clients a set of commands to use when setting parameters for their investments. In this embodiment, API  416  resides on user  401 &#39;s personal computer. User  401  is connected through a network  414 , such as the internet. Based on the set criteria, the selected fund  420  of user  401  is monitored over the network connection  414 . In the event that fund  420  fails to meet the criteria selected by user  401 , network connection  414  is used to automatically transfer the assets from fund  420  to another fund  422  that matches the criteria entered by user  401 . 
       FIG. 5  shows an exemplary embodiment of a method of allocating funds according to the present invention. In this embodiment, the invention determines an appropriate fund for investment based on predetermined criteria. The system first performs a routine check-up  530 . This allows the system to determine whether any of the assets fall outside the set criteria  532 . If the current assets are not within the set criteria, the system will determine whether or not there is another suitable fund that matches the criterion  534 . If there is no such suitable fund, the system will send a notice that there in no such suitable fund  536  and then end. If there is a suitable fund, the assets will be reinvested in a fund matching the set criteria  535 . With the funds reinvested, a confirmation will be sent  539  to the user, if the user has pre-selected this operation. If the user has not selected to receive a confirmation, nothing will be sent. 
     In one exemplary embodiment of the present invention, the system allows for predetermined “If/Then” criteria to determine which transactions will be made. These criteria can include, but are not limited to, the asset size of the fund, the gross performance of the fund, the net fund performance, or other various rating criteria, such as NAIC approval, Nynex/Comex, CME. The gross performance could be based on 1 day, 7 day, 30 day, 6 month, 12 month (annual), 3 year, 5 year, or 10 year averages. Net fund performance could be based on 1 day, 7 day, 30 day, 6 month, 12 month (annual), 3 year, 5 year, or 10 year averages. The other rating criteria could include various ratings criteria from NSRO&#39;s (Nationally Recognized Ratings Organizations such as Standard and Poors). 
       FIGS. 6A ,  6 B,  6 C, and  6 D show exemplary embodiments of the interface for the criterion selection process. In each of these figures, an If/Then selection process is utilized. In this embodiment, the user selects from certain criteria on the “If”  640  side of the selection screen  600  and decides whether or not he wants notification of an occurrence. The user also selects criteria from the “Then”  642  side of the selection screen  600  and decides whether or not he wants a confirmation of any transactions. If the “If”  640  criteria are satisfied, the system will process the “Then”  642  transaction that has been selected. Users are encouraged to make as many If/Then criterion selections as necessary for an asset. 
       FIG. 6A  shows an example of an exemplary embodiment of the selection screen. In this embodiment, the user has chosen that he wants his assets moved if the total asset size of a certain money market fund falls below $1 billion within the last day. The user has selected to receive notice if this event occurs. In the event of this occurrence, the user has selected to transfer the total fund to another fund that has had the highest net performance in the last 30 days. The user has also selected that this new fund must have an asset size of at least $1 billion and that the user wishes to be sent a confirmation of the transaction. 
       FIG. 6B  shows another example of an exemplary embodiment of the selection screen. In this embodiment, the user has chosen that he wants his assets moved if the gross fund performance of a certain mutual fund falls below 5.25% within the last 30 days. The user has selected to receive notice if this event occurs. In the event of this occurrence, the user has selected to transfer the total fund to another fund that has had the highest gross performance in the last 30 days. The user has not selected any further parameters for this fund but the user wishes to be sent a confirmation of the transaction. 
       FIG. 6C  shows an example of an exemplary embodiment of the selection screen. In this embodiment, the user has chosen that he wants his assets moved if the S&amp;P Rating of a certain money market fund falls below “AAA” or “Aaa” within the last day. The user has selected to receive notice if this event occurs. In the event of this occurrence, the user has selected to transfer the total fund to another fund that has had the highest S&amp;P Rating as of the last 20 days. The user has also selected that this new fund must have an asset size of at least $1 billion and that the user wishes to be sent a confirmation of the transaction. 
       FIG. 6D  shows a further example of an exemplary embodiment of the selection screen. In this embodiment, the user has chosen that he wants his assets moved if the net fund performance of a certain mutual fund falls below 5% within the last 15 days. The user has selected to receive (email) notification if this event occurs. In the event of this occurrence, the user has selected to transfer the total fund to another fund that has had the highest net fund performance in the last 60 days. The user has also selected that this new fund must have an S&amp;P Rating of at least AAA and that the user wishes to be sent a confirmation of the transaction. 
     Users are also encouraged to make many criterion selections for multiple assets and funds. For example, a fund manager may wish to take a vacation or need to leave the office for an extended period of time. This invention would allow the fund manager to set his parameters and automatically manage his funds from any place outside the office. 
       FIG. 7  shows an exemplary embodiment of the process of the application interface. The user first selects  700  the parameters and parameter limits of the fund to be monitored. Next, the user determines priority levels  702  of the parameters. This allows the user to determine the order in which the process will step through the parameters. If the highest level parameter is met, it may not be necessary for the process to go to the next parameter. However, if the highest level parameter is not met, the process may automatically start a transaction or it may look to the next parameter. With the priority levels  702  set, the application interface monitors  704  the fund parameters selected by the user. The process will then evaluate the parameter values  700  selected by the user. If a parameter falls below the limit of the user selected value, then the application interface selects  707  other funds where the selected parameter is greater than or equal to the selected value. The application interface matches selected funds  707  from the list of other funds that have the highest level of the next highest priority parameter  702  entered. With the funds matched, the application interface sends notification  708  to the user that a fund change is going to be made and allows the user to change parameter values and priority level. The system automatically transfers funds  709  from the original fund to the fund which matched the criteria. If no fund meets all the criteria, then the fund that meets the highest prioritized criteria possible is selected. The process then repeats, beginning with monitoring the new fund. This process can essentially act as an endless loop without need for further intervention by a user. In other words, the process serves to maximize its funds according to the pre-selected parameters set at 702. At any time the user may change the parameters  700  and priority level  702 . 
     As a non-limiting example, if a client was invested in a WACHOVIA MONEY MARKET FUND and had previously entered the criteria that any such fund he is invested in must have a portfolio size of at least $1 billion USD and the WACHOVIA MONEY MARKET FUND&#39;s assets subsequently dropped below this predetermined $1 billion level, his assets would automatically be transferred to another fund on the platform that had at least $1 billion in assets. 
     In another exemplary embodiment of the invention, more than one criterion may be entered in a particular sequence. The sets of criteria may be layered to establish the order in which the user prefers them to be carried out. For example, if the assets in the fund the user is currently investing in should drop below $1 billion the invention could automatically move the assets from the user&#39;s account into the highest yielding fund which also has assets of at least $1 billion. This requires the determination of when the fund has dropped below the $1 billion threshold and well as determining the highest yielding fund that does meet the threshold requirement. The determination of the highest yielding fund could be based upon the previous days close or some other metric. 
     In a further embodiment, once the criteria for selecting funds is established, it will remain uncharged until the account holder takes action to charge or remove their predetermined criteria. 
       FIG. 8A  shows an exemplary embodiment of a graphical user interface according to the present invention. In this embodiment, the user is given a parameter selection screen with which he inputs the parameters for his investment. The user chooses a parameter which he would like his investments based upon. He next can enter a value for this parameter. Additionally, the user can enter the priority of this parameter. Thus, if the user enters more than one parameter, he may dictate the order in which these parameters will be carried out. In the figure, the parameter the user has selected is fund assets. The user has entered a value of $1 billion for the fund assets. Thus, the user has set the threshold level of $1 billion for the fund assets value. This means that the investments will automatically be made based on reaching or falling below this threshold. The user has selected this to be the highest priority. As the highest priority, the fund asset parameter will take precedent over other selected parameters. 
       FIG. 8B  shows an exemplary embodiment of an example of the graphical user interface. In this example, the graphical user interface is showing the current parameter settings that the user has set. This interface shows the parameter selected, the parameter value, and the parameter priority value. The user can change the parameter selected and the interface will show the parameter value the user has set as well as the priority of that parameter the user has set. 
     The foregoing disclosure of the exemplary embodiments of the present invention has been presented for purposes of illustration and description. It is not intended to be exhaustive or to limit the invention to the precise forms disclosed. Many variations and modifications of the embodiments described herein will be apparent to one of ordinary skill in the art in light of the above disclosure. The scope of the invention is to be defined only by the claims appended hereto, and by their equivalents. 
     Further, in describing representative embodiments of the present invention, the specification may have presented the method and/or process of the present invention as a particular sequence of steps. However, to the extent that the method or process does not rely on the particular order of steps set forth herein, the method or process should not be limited to the particular sequence of steps described. As one of ordinary skill in the art would appreciate, other sequences of steps may be possible. Therefore, the particular order of the steps set forth in the specification should not be construed as limitations on the claims. In addition, the claims directed to the method and/or process of the present invention should not be limited to the performance of their steps in the order written, and one skilled in the art can readily appreciate that the sequences may be varied and still remain within the spirit and scope of the present invention.

Technology Category: 3