Investment funds enabling a bond laddering strategy

Abstract

An open-ended fund, such as an ETF, holds fixed-income securities and has a liquidation date. An order management system receives buy orders from a plurality of investors for purchasing shares of the fund receives and sell orders from a plurality of investors for selling shares of the fund. A fund management information system determines a yield for each investor based on the shares of the fund purchased by the investor and the fixed-income securities held by the fund at the time that the shares were purchased. The fund management information system also determines a plurality of distribution payments and a final liquidation payment for each investor so that the distribution payments and the final liquidation payment provide the yield determined for the investor when the investor purchased shares of the fund. This enables investors to use the fund in a bond laddering strategy.

What is claimed is: 
     
         1 . A method for administering a family of exchange-traded funds (ETFs) for use in a bond laddering strategy, the method comprising:
 establishing a plurality of open-ended ETFs, each ETF of the plurality of ETFs having a different liquidation date, wherein the liquidation dates of the plurality of ETFs are spread evenly over a time period;   for each of the plurality of ETFs:
 receiving, at an order management system from one or more authorized participants, one or more creation orders to create new shares of the ETF, 
 providing the created shares of the ETF to the one or more authorized participants, the shares of the ETF tradable on a secondary market, 
 determining, by a fund management information system, a set of distribution payments and a final liquidation payment for each share of the ETF, 
 paying the determined distribution payments to the investors who own shares of the ETF at a plurality of the intervals before the liquidation date of the ETF, and 
 paying the final liquidation payment to the investors who own shares of the ETF upon the liquidation date of the ETF; and 
   closing each of the ETFs based on the liquidation date of the ETF.   
     
     
         2 . The method of  claim 1 , further comprising:
 for each of the plurality of ETFs, holding assets comprising a plurality of fixed-income securities by the ETF.   
     
     
         3 . The method of  claim 2 , wherein one or more of the plurality of fixed-income securities held by each ETF are selected to have maturity dates based on the liquidation date of the ETF. 
     
     
         4 . The method of  claim 2 , wherein one or more of the plurality of fixed-income securities held by each ETF are selected to provide a final liquidation payment on or about the liquidation date of the ETF. 
     
     
         5 . The method of  claim 2 , wherein one or more of the plurality of fixed-income securities held by each ETF are selected to track a performance of a published index. 
     
     
         6 . The method of  claim 1 , further comprising:
 for each of the plurality of ETFs, holding a plurality of assets by the ETF, the assets selected by a fund manager using an active management strategy.   
     
     
         7 . The method of  claim 1 , further comprising:
 for each of the plurality of ETFs, holding a plurality of assets by the ETF, the assets comprising derivatives.   
     
     
         8 . The method of  claim 1 , further comprising:
 for each of the plurality of ETFs, holding a plurality of assets by the ETF, the assets comprising cash.   
     
     
         9 . The method of  claim 1 , wherein one or more of the distribution payments paid for a particular ETF of the plurality of ETFs are funded at least in part by proceeds from selling one or more assets held by the ETF. 
     
     
         10 . The method of  claim 1 , wherein one or more of the distribution payments paid for a particular ETF of the plurality of ETFs are funded at least in part by proceeds from distribution payments received for one or more assets held by the ETF. 
     
     
         11 . The method of  claim 1 , wherein one or more of the distribution payments paid for a particular ETF of the plurality of ETFs are zero. 
     
     
         12 . The method of  claim 1 , wherein the final liquidation payment paid for a particular ETF of the plurality of ETFs is funded at least in part by proceeds from selling one or more assets held by the ETF. 
     
     
         13 . The method of  claim 1 , wherein the final liquidation payment paid for a particular ETF of the plurality of ETFs is funded at least in part by proceeds from distribution payments received for one or more assets held by the ETF. 
     
     
         14 . The method of  claim 1 , wherein the final liquidation payment paid for a particular ETF of the plurality of ETFs is zero. 
     
     
         15 . A system for administering an exchange-traded funds (ETF) for use in a bond laddering strategy, the system comprising:
 a computing system configured to access one or more accounts that hold a plurality of assets by each of a plurality of open-ended ETFs, each ETF of the plurality of ETFs having a different liquidation date, wherein the liquidation dates of the plurality of ETFs are spread evenly over a time period;   an order management system comprising a processor configured to:
 receive one or more creation orders to create new shares of the ETF from one or more authorized participants, and 
 provide the created shares of the ETF to the one or more authorized participants, the shares of the ETF tradable on a secondary market; and 
   a fund management information system comprising a processor configured to:
 determining a set of distribution payments and a final liquidation payment for each share of the ETF, 
 initiate payment of the determined distribution payments to the investors who own shares of the ETF at a plurality of the intervals before the liquidation date of the ETF, and 
 initiate payment of the final liquidation payment to the investors who own shares of the ETF upon the liquidation date of the ETF. 
   
     
     
         16 . The system of  claim 15 , wherein the one or more accounts hold assets comprising a plurality of fixed-income securities by each ETF. 
     
     
         17 . The system of  claim 16 , wherein one or more of the plurality of fixed-income securities held by each ETF have maturity dates based on the liquidation date of the ETF. 
     
     
         18 . The system of  claim 16 , wherein one or more of the plurality of fixed-income securities held by each ETF provide a final liquidation payment on or about the liquidation date of the ETF. 
     
     
         19 . The system of  claim 15 , wherein the one or more accounts hold a plurality of derivatives by each ETF. 
     
     
         20 . The system of  claim 15 , wherein the one or more accounts hold cash by each ETF. 
     
     
         21 . The system of  claim 15 , wherein the fund management information system is configured to initiate payment of one or more of the distribution payments paid for a particular ETF of the plurality of ETFs, where the distribution payment is zero. 
     
     
         22 . The system of  claim 15 , wherein the fund management information system is configured to initiate payment of one or more of the final liquidation payments paid for a particular ETF of the plurality of ETFs, where the final liquidation payment is zero.