Most exchange traded fund firms are partnered with prominent index providers to market their products, but a growing faction of fund managers are beginning to get into the indexing game.

Some ETF providers are engineering products designed to reflect their own private indices, reports Ian Salisbury for Smart Money.

ETF products try to reflect the performance of an underlying benchmark index. For years, ETFs were based on well-known, name brand benchmarks, like the Standard & Poor’s indices. [What is an ETF? — Indexing]

Van Eck, the parent company behind the Market Vectors line, is marketing over a dozen ETFs indexed to in-house benchmarks, and several other firms, including iShares, are looking to create their own offerings. [Van Eck Launches Index Unit]

Industry observers note that the providers want to cut out the middle men, along with the hefty royalties that come with brand-name indices, and reduce costs for clients.

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