Capital Markets Index
Encyclopedia
The Capital Markets Index (CPMKTSsm) is an investment
tool that tracks the value of traditional investment-grade U.S. capital market
securities. CPMKTS is a real-time, market-weighted index. It includes approximately 9,500 equity
, fixed income
and money market
instruments.
CPMKTS index was launched by Dorchester Capital Management Company of Houston, Texas
on May 4, 2006. The Capital Markets Index is carried on the American Stock Exchange
under the symbol CPMKTS with updates every 15 seconds.
instruments.
Other indexes within the CPMKTS family measure sub-segments of the market.
The Amex
also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds
and liquidity, respectively.
The CPMKTS and its family of indexes were created to meet the market's need for:
Highlights of the CPMKTS index include:
). Each day 200 million pieces of information are added.
The data is organized, processed and updated every 15 seconds. This statistical selection removes the subjectivity associated with other indexes. It accurately represents the history, mix and behavior of the capital markets.
How the index is calculated
, Warren Schmalenberger, current President and CEO of [Dorchestor Capital Management Company] asked himself why no index had ever been devised that would measure the overall value of the U.S. capital markets.
Equity indices—as exemplified by the well-known Dow Jones and Standard & Poor's
indices—were immediately recognizable. Yet no one was tracking bonds or money market investments - much less the total value of U.S. capital markets.
As Mr. Schmalenberger considered this possibility, he became convinced that a capital markets index would have value not only among the professional investment community, but also among individual investors.
In the ensuing years, Mr. Schmalenberger gave additional thought to the idea, even as he was building a career in the financial-services industry. Several new indexes were developed and launched during this period, and creative variations such as exchange-traded funds (ETFs) and index mutual fund gained huge popularity among investors. However, a capital markets index was not among those developed.
In 1995, Mr. Schmalenberger founded [Dorchester Capital Management Co.] in Houston. By that time, bond indexes were firmly established within the fixed-income markets, but there was still no index tracking liquidity, the total value of the U.S. capital markets or the asset allocation among equities, bonds and money market instruments.
He continued to believe that a capital markets index made sense—both intellectually and from a commercial standpoint. He also believed—and subsequent research would validate his conviction—that there would be strong market demand for a more-sophisticated measure of the performance of the entire capital market, an improved measure of risk-reward ratios, and better tools with which to make asset-allocation and investment decisions.
The process of building the Capital Markets Index, known as CPMKTS, thus was under way.
Warren F. Schmalenberger is the founder and chief executive officer of Dorchester Capital Management Company. Mr. Schmalenberger is responsible for the company's strategic direction, as well as product development.
Prior to founding Dorchester, Mr. Schmalenberger was a managing director at Transamerica Fund Management Company, where in addition to his product development, communications and marketing responsibilities, he directed all fixed income investments. Previously, he served as vice chairman of the asset-liability committee at a savings and loan association, where he oversaw investment, finance and liquidity strategies and implementation.
Earlier in his career, he worked at Bank of America in the bank investment securities division. During this period, he designed and built the first database of daily commercial financial statistics, which is currently in use by hundreds of institutions worldwide, and authored a weekly economic and bond market newsletter. He later served as a member of the team that managed the bank's multibillion-dollar portfolio of U.S. Treasury, federal agency, mortgage-backed and municipal securities, and was a member of the bank's interest rate committee.
Mr. Schmalenberger received a bachelor's degree from St. Johns College, "Great Books Program," and earned his MBA while studying with individuals who would later become Nobel Prize Laureates at The University of Chicago
.
Paul Stockton
Paul E. Stockton is responsible primarily for Sales and Marketing and serves on the company's Advisory Board. Mr. Stockton has broad and diverse experience spanning research, marketing, sales, general management and consulting for global market leaders.
Alan D. Vera, CDC
Alan D. Vera is a noted marketing communications expert who has pioneered the application of consumer product marketing techniques to the marketing of a broad spectrum of industrial, financial, technical and professional products and services. Mr. Vera advises Dorchester on the development and implementation of both short- and long-term marketing and sales strategies to further the company's business goals.
Jean McFadden
Jean McFadden has over 15 years experience in product and project management in the financial services industry focused on development and marketing of mutual funds, tax-deferred products for retirement and college saving and ETFs. Her responsibilities with Dorchester include researching new investment product opportunities, assisting with launch coordination, and providing training for investment products based on Dorchester indexes.
Brandon Wallace
Brandon Wallace has over 15 years experience developing financial analytics software. His areas of expertise include fixed income analytics, portfolio management tools, database design, data gathering, and accounting. Brandon’s responsibilities with Dorchester include designing and implementing the index equity and fixed income analytics, the securities database, and the automated systems which acquire, standardize, and merge the data from our various financial data providers.
Matthew Lott
Matthew Lott has over a decade of computer development experience, the last six years in the financial sector. His areas of expertise include developing software for portfolio management, trade management, and fixed income and money market analytics. Matthew’s primary area of responsibility with Dorchester was the development of the application to calculate the CPMKTL and CPMKTB real-time Liquidity and Bond indexes.
Joshua J. Perryman
Josh Perryman has over a decade in technology management and software development experience. His areas of expertise include technology security, systems maintenance & monitoring, and operational procedure development. Josh’s primary areas of responsibility with Dorchester have been systems management and the implementation of the index constituent selection process.
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
tool that tracks the value of traditional investment-grade U.S. capital market
Capital market
A capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...
securities. CPMKTS is a real-time, market-weighted index. It includes approximately 9,500 equity
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
, fixed income
Fixed income
Fixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....
and money market
Money market
The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit,...
instruments.
CPMKTS index was launched by Dorchester Capital Management Company of Houston, Texas
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
on May 4, 2006. The Capital Markets Index is carried on the American Stock Exchange
American Stock Exchange
NYSE Amex Equities, formerly known as the American Stock Exchange is an American stock exchange situated in New York. AMEX was a mutual organization, owned by its members. Until 1953, it was known as the New York Curb Exchange. On January 17, 2008, NYSE Euronext announced it would acquire the...
under the symbol CPMKTS with updates every 15 seconds.
Product Details
CPMKTS measures the capital markets on a consolidated basis. Rather than further subdivide the market as other indexes do, CPMKTS views the capital markets on a broader basis and therefore includes stocks, bonds and money market instruments. It satisfies the needs of both professional and lay investors for a measurement tool for mixed or blended portfolios and provides the basis for a wide variety of investmentInvestment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
instruments.
Other indexes within the CPMKTS family measure sub-segments of the market.
The Amex
AMEX
AMEX, AmEx or Amex may refer to:*American Stock Exchange*American Express, a global financial services corporation*American Express Community Stadium, association football stadium in Brighton, England, currently sponsored by American Express...
also publishes sub-indexes CPMKTE, CPMKTB and CPMKTL, tracking equities, bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
and liquidity, respectively.
The CPMKTS and its family of indexes were created to meet the market's need for:
- More sophisticated measures of capital marketCapital marketA capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...
performance - Improved measures of risk and return
- Better tools to make asset-allocation and investment decisions
Highlights of the CPMKTS index include:
- Comprises stocks, bonds, and money market instruments from the US investment grade capital markets.
- Component fixed income securities and money market instruments are revised monthly. Component equity securities are revised quarterly. All weightings are revised monthly.
- Completely transparent rules-based selection criteria.
- Has documented demand from investment professionals and individual investors as benchmark tool and as a basis for investment product basis, as documented by Harris Interactive/Quest Business Agency Market Research
- Delivers capital market return for capital market risk
- Replicates the capital markets' actual asset allocation
- No known competitors in measuring the broader capital markets' performance
- Back-tested to December 1979 using the same methodology employed for ongoing revisions and calculations.
How it works
Dorchester [www.cpmkts.com] has collected over 30 years of historical data—including government statistics and market changes—which now are stored in the company's computers (two systems in Houston and a redundant system in ChicagoChicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
). Each day 200 million pieces of information are added.
The data is organized, processed and updated every 15 seconds. This statistical selection removes the subjectivity associated with other indexes. It accurately represents the history, mix and behavior of the capital markets.
How the index is calculated
- Real-time and historical data have been acquired from multiple financial and government sources.
- Data is organized, normalized and processed.
- Dorchester's CPMKTIG is formulated, using all the investment-grade capital market assets and allocations.
- CPMKTS is the real-time index representation of the entire investment-grade U.S. capital market as derived from CPMKTIG and calculated by Dorchester and the AMEX.
- The AMEX publishes CPMKTS and its component indexes on the "tape" every 15 seconds.
Company history
In the mid-1970s, while attending graduate school at the University of ChicagoUniversity of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
, Warren Schmalenberger, current President and CEO of [Dorchestor Capital Management Company] asked himself why no index had ever been devised that would measure the overall value of the U.S. capital markets.
Equity indices—as exemplified by the well-known Dow Jones and Standard & Poor's
Standard & Poor's
Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
indices—were immediately recognizable. Yet no one was tracking bonds or money market investments - much less the total value of U.S. capital markets.
As Mr. Schmalenberger considered this possibility, he became convinced that a capital markets index would have value not only among the professional investment community, but also among individual investors.
In the ensuing years, Mr. Schmalenberger gave additional thought to the idea, even as he was building a career in the financial-services industry. Several new indexes were developed and launched during this period, and creative variations such as exchange-traded funds (ETFs) and index mutual fund gained huge popularity among investors. However, a capital markets index was not among those developed.
In 1995, Mr. Schmalenberger founded [Dorchester Capital Management Co.] in Houston. By that time, bond indexes were firmly established within the fixed-income markets, but there was still no index tracking liquidity, the total value of the U.S. capital markets or the asset allocation among equities, bonds and money market instruments.
He continued to believe that a capital markets index made sense—both intellectually and from a commercial standpoint. He also believed—and subsequent research would validate his conviction—that there would be strong market demand for a more-sophisticated measure of the performance of the entire capital market, an improved measure of risk-reward ratios, and better tools with which to make asset-allocation and investment decisions.
The process of building the Capital Markets Index, known as CPMKTS, thus was under way.
Executives
Warren Schmalenberger — Founder and CEOWarren F. Schmalenberger is the founder and chief executive officer of Dorchester Capital Management Company. Mr. Schmalenberger is responsible for the company's strategic direction, as well as product development.
Prior to founding Dorchester, Mr. Schmalenberger was a managing director at Transamerica Fund Management Company, where in addition to his product development, communications and marketing responsibilities, he directed all fixed income investments. Previously, he served as vice chairman of the asset-liability committee at a savings and loan association, where he oversaw investment, finance and liquidity strategies and implementation.
Earlier in his career, he worked at Bank of America in the bank investment securities division. During this period, he designed and built the first database of daily commercial financial statistics, which is currently in use by hundreds of institutions worldwide, and authored a weekly economic and bond market newsletter. He later served as a member of the team that managed the bank's multibillion-dollar portfolio of U.S. Treasury, federal agency, mortgage-backed and municipal securities, and was a member of the bank's interest rate committee.
Mr. Schmalenberger received a bachelor's degree from St. Johns College, "Great Books Program," and earned his MBA while studying with individuals who would later become Nobel Prize Laureates at The University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
.
Paul Stockton
Paul E. Stockton is responsible primarily for Sales and Marketing and serves on the company's Advisory Board. Mr. Stockton has broad and diverse experience spanning research, marketing, sales, general management and consulting for global market leaders.
Alan D. Vera, CDC
Alan D. Vera is a noted marketing communications expert who has pioneered the application of consumer product marketing techniques to the marketing of a broad spectrum of industrial, financial, technical and professional products and services. Mr. Vera advises Dorchester on the development and implementation of both short- and long-term marketing and sales strategies to further the company's business goals.
Jean McFadden
Jean McFadden has over 15 years experience in product and project management in the financial services industry focused on development and marketing of mutual funds, tax-deferred products for retirement and college saving and ETFs. Her responsibilities with Dorchester include researching new investment product opportunities, assisting with launch coordination, and providing training for investment products based on Dorchester indexes.
Brandon Wallace
Brandon Wallace has over 15 years experience developing financial analytics software. His areas of expertise include fixed income analytics, portfolio management tools, database design, data gathering, and accounting. Brandon’s responsibilities with Dorchester include designing and implementing the index equity and fixed income analytics, the securities database, and the automated systems which acquire, standardize, and merge the data from our various financial data providers.
Matthew Lott
Matthew Lott has over a decade of computer development experience, the last six years in the financial sector. His areas of expertise include developing software for portfolio management, trade management, and fixed income and money market analytics. Matthew’s primary area of responsibility with Dorchester was the development of the application to calculate the CPMKTL and CPMKTB real-time Liquidity and Bond indexes.
Joshua J. Perryman
Josh Perryman has over a decade in technology management and software development experience. His areas of expertise include technology security, systems maintenance & monitoring, and operational procedure development. Josh’s primary areas of responsibility with Dorchester have been systems management and the implementation of the index constituent selection process.