In Which Field/Sub-Field Should You Invest In, Taking Into Account Patent Dynamics?

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Includes: IYZ, VOX-OLD, XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY
by: Innovalpha

Summary

Industrials (XLI) in first spot, Health Care (XLV) last.

Sub-field Internet (ICB 9535) in first spot.

Telecommunications Equipment (ICB 9578) last.

1. FIELDS IP INDEXES

According to patent patterns identified within fields, the following fields (or selected companies within these fields) are to be considered by investors:

  • Industrials Select Sector SPDR ETF (TICKER: XLI)
  • Energy Select Sector SPDR ETF (TICKER: XLE)
  • Technology Select Sector SPDR ETF (TICKER: XLK)
  • Materials Select Sector SPDR ETF (TICKER: XLB)

Whereas precaution is warranted for the following ones:

  • Health Care Select Sector SPDR ETF (TICKER: XLV)
  • Utilities Select Sector SPDR ETF (TICKER: XLU)
  • Consumer Staples Select Sector SPDR ETF (TICKER: XLP)
  • Financials Select Sector SPDR ETF (TICKER: XLF)

The system is neutral for:

  • Consumer Discretionary Select Sector SPDR ETF (TICKER: XLY)
  • Telecommunications sector, e.g. Vanguard Telecom Services ETF (TICKER: VOX-OLD) or iShares U.S. Telecommunications ETF (TICKER: IYZ)

We provide below the listing of fields sorted by Grade and Score computed from weekly fields Patent Indexes (NASDAQ:PI).

For the investors, it probably makes more sense to take into consideration sub-fields in order to identify in a more precise manner promising booming activities or in contrast those that are declining/collapsing (see section 2 below).

  • Highlight for Industrials in first spot: IP Index over time

IP Index of 18564, Grade A with a Score of 148, an IP Index Mean of 32, an IP Index Max of 1618 and 580 companies involved.

Listing of FIELDS - Sorted by Grade and Score

FIELDS

GRADE

PI

WTREND

SCORE

PI_Mean

PI_Max

Count

Industrials

A

18564

DOWN

148

32

1618

580

Oil & Gas

A

3241

UP

98

34

935

93

Technology

B

19247

DOWN

72

75

2572

254

Basic Materials

C

8205

UP

54

32

877

251

Consumer Services

C

1010

UP

4

7

176

142

Telecommunications

C

743

DOWN

0

20

257

37

Financials

D

280

UP

-6

2

72

102

Consumer Goods

D

18607

DOWN

-8

53

1897

351

Utilities

D

235

DOWN

-10

4

59

49

Health Care

D

4458

UP

-16

19

312

223

PI = Patent Index

Wtrend = weekly trend

Grade: From A to D, determined by the type of patent pattern

Score: computed by summing bonus/malus points

Count = Number of companies taken into account to build the Patent Index

2. SUB-FIELDS IP INDEXES

Investor might be interested to know which sub-fields are currently booming or in contrast those that are declining according to patent patterns within the sub-fields. All sub-fields have been taken into account in line with the ICB Industry Classification Benchmark.

2.1 Changes in IP Indexes

We consider first the weekly changes (upgrades and downgrades) in the IP Indexes.

  • ICB 1755 (Nonferrous Metals) is UPGRADED to GRADE C with an IP Index of 168 with a Score of 0, IP Index mean of 11, IP Index max of 61 and with 15 companies in the IP Index.

  • ICB 9576 (Semiconductors) is DOWNGRADED to GRADE B with an IP Index of 7047 with a Score of 94, IP Index mean of 75, IP Index max of 2572 and with 93 companies in the IP Index.

  • ICB 9537 (Software) is DOWNGRADED to GRADE C with an IP Index of 1816 with a Score of 54, IP Index mean of 41, IP Index max of 1411 and with 44 companies in the IP Index.

2.2 ICB IP Indexes

Below is the listing of all ICBs. As mentioned, such listing allows the investor to identify for example booming and collapsing sub-fields. For example, we have the sub-field Internet in first spot (ICB9535) and investor might consider investing in an ETF tracking such ICB or selecting companies within this field. In contrast, as an example Telecommunications Equipment (ICB 9578) is collapsing and the investor shall be cautious. As for the general fields, IP Indexes for the sub-fields are also generated on a weekly basis.

Highlight Internet (ICB 9535) in first spot: IP Index over time

Grade A with an IP Index of 2103, a Score of 194, IP Index Mean of 175, IP Index Max of 1147 and 12 companies in the Index.

2.3 Listing of all ICBs - Sorted by Grade and Score

ICB

CHANGES

GRADE

PI

WTREND

SCORE

PI_Mean

PI_Max

Count

9535

SAME

A

2103

UP

194

175

1147

12

6535

SAME

A

298

DOWN

116

17

138

17

573

SAME

A

2042

UP

114

55

935

37

2733

SAME

A

3679

UP

110

44

881

83

5371

SAME

A

35

DOWN

38

3

22

9

9576

DOWNGRADE

B

7047

DOWN

94

75

2572

93

2713

SAME

B

1366

UP

90

65

1005

21

5377

SAME

B

303

UP

74

27

122

11

9574

SAME

B

1845

UP

62

205

1088

9

9572

SAME

B

1853

DOWN

62

88

963

21

2757

SAME

B

4843

DOWN

62

41

1518

117

2717

SAME

B

666

DOWN

54

47

220

14

3763

SAME

B

275

DOWN

54

8

110

33

2791

SAME

B

501

SAME

52

13

287

37

3765

SAME

B

272

SAME

52

27

234

10

3728

SAME

B

132

UP

50

22

122

6

5373

SAME

B

70

UP

48

7

56

9

5555

SAME

B

23

SAME

28

2

6

11

9537

DOWNGRADE

C

1816

DOWN

54

41

1411

44

3355

SAME

C

2797

DOWN

52

43

331

64

1757

SAME

C

741

SAME

44

20

241

36

4535

SAME

C

1402

UP

42

32

312

43

2753

SAME

C

1350

DOWN

40

29

263

46

2727

SAME

C

3843

UP

40

123

1618

31

2357

SAME

C

161

SAME

36

3

46

48

2723

SAME

C

327

UP

32

13

95

25

1353

SAME

C

3333

DOWN

26

69

877

48

9533

SAME

C

111

DOWN

24

3

20

28

2797

SAME

C

53

SAME

24

4

12

13

3357

SAME

C

800

UP

24

72

332

11

537

SAME

C

756

UP

22

32

272

23

1737

SAME

C

110

DOWN

18

7

24

15

3573

SAME

C

57

DOWN

18

5

35

10

3745

SAME

C

310

DOWN

18

28

146

11

1775

SAME

C

32

SAME

16

3

17

9

2777

SAME

C

26

SAME

16

1

11

14

3537

SAME

C

71

SAME

16

10

43

7

3747

SAME

C

61

UP

14

5

26

11

2737

SAME

C

720

DOWN

12

18

138

40

3722

SAME

C

1602

DOWN

12

66

544

24

5752

SAME

C

24

SAME

12

1

5

13

2795

SAME

C

37

SAME

12

6

33

6

1357

SAME

C

3721

UP

12

32

509

114

2353

SAME

C

902

DOWN

12

14

328

63

533

SAME

C

257

DOWN

12

11

120

23

4573

SAME

C

620

UP

10

14

133

44

7573

SAME

C

34

SAME

10

3

12

9

8777

SAME

C

38

UP

8

3

21

11

5557

SAME

C

142

UP

8

9

107

15

7575

SAME

C

14

SAME

4

1

4

9

8633

SAME

C

19

UP

4

1

5

15

5379

SAME

C

17

SAME

2

1

7

9

8575

SAME

C

7

SAME

2

0

3

10

1755

UPGRADE

C

168

UP

0

11

61

15

5755

SAME

D

23

SAME

24

7

14

3

1753

SAME

D

94

DOWN

24

18

33

5

2773

SAME

D

13

SAME

18

2

13

5

8773

SAME

D

125

UP

18

31

72

4

2771

SAME

D

59

DOWN

14

14

38

4

8673

SAME

D

11

SAME

14

11

11

1

2793

SAME

D

5

DOWN

8

2

5

2

5375

SAME

D

4

SAME

6

1

4

4

5757

SAME

D

10

SAME

6

3

9

3

5753

SAME

D

7

SAME

4

1

5

4

7537

SAME

D

22

SAME

4

5

16

4

2775

SAME

D

5

SAME

4

1

2

4

8671

SAME

D

1

SAME

2

0

1

2

8677

SAME

D

2

SAME

2

2

2

1

8538

SAME

D

9

SAME

0

3

5

3

8637

SAME

D

0

SAME

0

0

0

2

7577

SAME

D

5

DOWN

0

1

4

3

5337

SAME

E

17

SAME

-2

1

6

9

2779

SAME

E

5

SAME

-2

2

5

2

1779

SAME

E

0

SAME

-2

0

0

3

1771

SAME

E

3

SAME

-2

1

2

3

8675

SAME

E

10

SAME

-2

2

7

5

8771

SAME

E

5

UP

-2

0

2

9

8775

SAME

E

6

SAME

-2

0

4

7

2799

SAME

E

3

SAME

-4

0

1

5

5333

SAME

E

8

SAME

-4

1

6

5

8674

SAME

E

6

SAME

-4

6

6

1

3577

SAME

E

459

UP

-4

7

73

65

4533

SAME

E

114

DOWN

-6

10

82

11

3535

SAME

E

8

SAME

-6

4

7

2

8536

SAME

E

0

SAME

-6

0

0

4

577

SAME

E

18

DOWN

-6

18

18

1

5751

SAME

E

15

UP

-6

1

13

9

3785

SAME

E

233

UP

-6

25

83

9

3533

SAME

E

35

UP

-8

4

12

8

8532

SAME

E

0

SAME

-8

0

0

3

5553

SAME

E

116

UP

-8

6

86

18

1777

SAME

E

3

UP

-8

1

2

3

8355

SAME

E

41

DOWN

-10

1

9

24

4537

SAME

E

573

UP

-14

22

111

26

3726

SAME

E

17

SAME

-18

1

9

11

3353

SAME

E

3006

SAME

-22

125

1262

24

3724

SAME

E

290

DOWN

-22

32

232

9

3767

SAME

E

909

UP

-24

39

196

23

7535

SAME

E

160

DOWN

-24

6

59

24

4577

SAME

E

1749

DOWN

-32

17

213

99

6575

SAME

E

445

DOWN

-36

22

257

20

583

SAME

E

168

DOWN

-36

18

76

9

3743

SAME

E

7273

UP

-46

559

1897

13

5759

SAME

E

196

UP

-68

19

176

10

9578

SAME

E

4472

DOWN

-86

95

1887

47

PI = Patent Index

Wtrend = weekly trend

Grade: From A to E, determined by the type of patent pattern

Score: computed by summing bonus/malus points

Count = Number of companies taken into account to build the Patent Index

DISCLAIMER: The information provided in this document is given for indicative purposes only. Innovalpha Sàrl. provides no assurance as to its completeness or accuracy nor the reasonableness of the conclusions based upon such information. This document is not intended to constitute an offer or solicitation for the purchase or sale of an investment program or of any one or more of the models mentioned in the document. There is no assurance that the models investment objectives will be achieved and investment results may vary significantly over time. Past performance should not be construed as a guide to future performance. The content of this document is subject to change without prior notification. All information and data presented in this document is for informational purpose only and should not be reproduced, distributed nor used without prior written authorization of Innovalpha Sàrl.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.