Sons And Daughters Of BBCMF Nanotechnology Company/IndustryResearch

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The Nanotechnology.com Small Technology IndexTM
is based on 30 international, publicly traded "small tech" stocks and is VERY different from other so-called nanotechnology stock indices in several important ways as described below.

The Index is composed of small technology stocks, not only nanotechnology stocks, and are:

Accelrys, Advanced Magnetics, Affymetrix, Agilent, American Pharmaceutical Partners, ANSYS, Applied Films, Cabot Microelectronics, Caliper Life Sciences, Cambridge Display Technology, Cepheid, Chartered Semiconductor, Coherent, Elan, FEI Company, Flamel Technologies, FormFactor, Freescale Harris & Harris Group, Ilumina, Kopin, Luminex, MTS Systems, Nanophase Technologies, NUCRYST Pharmaceuticals, pSivida Limited, Symyx Technologies, Tessera Technologies, Veeco Instruments and Xilinx.

We developed our Index to reflect the intelligent investment process of a professional investor or fund manager with $30 Million to invest in such a portfolio in March 2006 dollars. Unlike other indices, we believe we have created a "smart" index, that not only reflects the diversification and industry mix related to the growth and impacts of MEMs, microfluidics, nanotech and cutting edge of microelectronics, but one that will be a challenging target for investors to beat.

Our collaborating scientists and seasoned investment executives concluded that the inclusion of Fortune 500 companies, like IBM, Chevron, Intel, GE and DuPont with huge stakes in small tech intellectual property, but relatively insignificant small tech product revenue, renders some indices practically useless. Furthermore, we believe the public and professional investors and money managers to be ill-served when illiquid and over-promoted Bulletin Board shares participate.

Leading scientists and financial pros developed The Nanotechnology.com Small Technology Index.

The portfolio design of a sophisticated fund manager with $30 million to place in this area would diversify by geography, industry sector, type of small tech (microfluidics, MEMs, nanotech and microelectronics), market capitalization, etc., and the manager would “weight” liquid stocks more heavily than illiquid shares; larger caps more heavily than smaller caps.

We have done that.

Following is some of the thought process behind how The Nanotechnology.com Small Technology Index was calculated on start date March 15, 2006 and the "why" and how it is up-dated, minute to minute on our site.

We considered both "market capitalization weighted" and "equal dollar weighted" index methodologies (the 2 most common) and decided that both jeopardized the integrity of an index based on such a limited universe (75-100 total international companies) with so many micro and mini-caps ($25 to $250 million) and a sprinkling of mid-caps ($5-20 billion) whose performance would dwarf them.

So, like the U.S. Congress, made up of both a Senate and House of Representatives, we tried to create some balance, with larger cap stocks playing a more significant role, but not as much as their size alone would dictate. Again, we asked the question: "what would a professional investor do with $30 million, told he or she had to invest at least 1 ½ % in each of these particular 30 stocks?"

Here's how the Index was calculated on March 15, 2006 and continues to be calculated. On the first day we established a constant divisor called "K" like this:

We added the following $ amounts at end of day (March 14, 2006) or any point in time for these stock symbols. (in thousands of shares)

47 shares of A
70 XLNX
86 ELN
18 ABII
29 AFFX
165 CHRT
31 TSRA
40 FORM
22 ANSS
22 COHR
25 SMMX
20 CCMP
27 ILMN
17 MTSC
32 FEIC
30 VECO
27 FLML
44 LMNX
62 CPHD
135 KOPN
92 CALP
24 AMAG
50 TINY
55 NCST
86 ACCL
83 NANX
65 OLED
87 PSDV

After adding these, we divided it by the number "K" that made the Index equal to 1000. Then that # "K" is the key number in calculating the Index and remains the constant until and unless the makeup of the Index membership changes due to the addition or subtraction of member, stock dividend or split.

*On July 8, 2006 Applied Films Corp. (AFCO) was taken over by Applied Materials Inc. (AMAT). As of that date 34 shares of AFCO were removed from the Nanotechnology.com Small Technology Index and replaced with 161 shares of Luna Innovations Incorporated (LUNA).

*On December 2, 2006 Freescale Semiconductor (FSL) was taken over by a private equity group in the largest high-tech takeover in history (some $17 billion). As of that date 52 shares of FSL were removed and replaced with 100 shares of Lumera (LMRA), 20 additional shares of XLNX, 13 additional shares of FORM and 40 additional shares of CHRT.

*On September 19, 2007 Cambridge Display Technology (OLED) was taken over by Sumitomo Chemical Company at approximately $12/share. As of that date 65 shares of OLED were removed and replaced with 49 shares of Universal Display (PANL).

*On November 14, 2007 Abraxis BioScience, (ABBI) split itself into two separate companies, a new Abraxis BioScience (ABII) – fully-focused on developing the company’s nanoparticle cancer therapeutics including their Abraxane, and APP Pharmaceuticals (APPX) – developing the company’s hospital product business. For every share of ABBI shareholders were given 1 share of APPX and ¼ share of ABII. We had 37 shares of ABBI accounted for in our Index. Because of our focus, we took the approximate valuation of the combined companies on opening and divided by the price of ABII. 37 shares of ABBI became 18 shares of ABII for our index since we have no interest in the now-separate hospital product business, and this transaction could have actually been accomplished in the market.

http://www.nanotechnology.com/stocks/?a=index