System and method for creating and administering an investment instrument

A system configured to enable investors to participate in a market index and preserve principal, said system comprising:

• a module configured for offering for sale an investment instrument, wherein said investment instrument includes a face value, term and date of maturity;
• a module configured for accepting purchase funds from a purchaser of said investment instrument;
• at least two return-generating models for said investment instrument configured to allow said purchaser to chose at least one of said return-generating models, at least one of said return-generating models being based on at least one of full and partial investment in a market index;
• a first module configured for calculating a return earned by said investment instrument at an end of at least one of said term and said date of maturity according to said return-generating model selected by said purchaser;
• a second module configured for calculating said principal of said investment instrument by adding said return to said face value;
• a module configured for guaranteeing said principal against losses;
• and
• a module configured for distributing to said purchaser a monetary equivalent of at least one of said principal, and said return at said end of at least one of said term and said date of maturity.

A computer-implemented method of investing, in which the investor participates in a market index while protecting principal, comprising:

• purchasing, via a host computer, an investment instrument, wherein said investment instrument includes a certain face value, term and date of maturity;
• selecting, via said host computer, a return-generating model for said investment instrument from at least two different return-generating models, at least one of said return-generating models being based on at least one of full and partial investment in a market index;
• earning interest on said investment instrument in accordance with said return-generating model;
• and
• receiving the monetary equivalent of said face value and said interest at the end of at least one of said term and said date of maturity.

A computer-implemented method for enabling investors to participate in a market index and preserve principal, said method comprising:

• offering for sale, via a host computer, an investment instrument, wherein said investment instrument includes a face value, term and date of maturity;
• allowing, via said host computer, a purchaser of said investment instrument to select a return-generating model for said investment instrument from at least two different return-generating models, at least one of said return-generating models being based on at least one of full and partial investment in a market index;
• accepting, via said host computer, from said purchaser, a purchase order and purchase funds for said investment instrument;
• issuing, via said host computer, said investment instrument in a name of said purchaser upon receipt of said purchase order and said purchase funds;
• calculating, via said host computer, a return earned by said investment instrument at an end of at least one of said term and said date of maturity according to said return-generating model selected by said purchaser;
• adding, via said host computer, said return to said face value of said investment instrument to calculate said principal of said investment instrument;
• guaranteeing said principal against losses;
• and
• distributing the monetary equivalent of at least one of said principal and said return to said purchaser at the end of said term.