LEADING THE WAY SINCE 2005 IN #AI FOR TALENT AND TEAMS

ABSTRACT

A system and method for mass market hedge fund investing is proposed  that preferably works in conjunction with the U.S. Treasury's Treasury  Direct program for direct investment in U.S. Government securities. A  primary investment in a principal-guaranteed, fixed term financial  instrument, such as U.S. Government securities, including U.S. Notes,  Bonds and Treasury Inflation-Protected Securities (TIPS) having  principal linked to the Consumer Price Index, wherein the principal is  guaranteed to the extent of the full faith and credit of the U.S.  Government, generates an interest income stream. The interest stream is  electronically diverted to a separate account within an aggregated pool  invested in a hedge fund over a predetermined time horizon. The fund is  preferably run by an experienced chief portfolio strategist and a  money-management team."

PREFERRED EMBODIMENT

"In a preferred embodiment, at inception the Investor selects both a time  horizon for securities under the U.S. Treasury Direct (USTD) program  and for the interest stream generated and used to increase his hedge  fund holdings. Under the USTD program, individual investors can set up  an account and purchase electronic securities directly from the U.S.  Treasury. Treasury Direct account holders may purchase 4, 13, and  26-Week Treasury Bills, 2 3, 5, and 10-Year Notes, and 5, 10, and  20-Year TIPS. 30-Year Bonds will also be available when they are  re-introduced by Treasury. Semiannual interest and final maturity  payments are sent through the Automated Clearing House (ACH) network to  the Investor's designated financial institution account. Interest and  maturity payments may be sent to two different locations, depending upon  the Investor's investment needs. The time horizon for the interest  investment stream can be coordinated with the maturity date of the  respective treasury that the Investor initially chooses. The Investor  can plan with exactness for the timely payout of his guaranteed  principal portion from the U.S. Government as well as the monies  invested with the hedge fund or other asset class."