ProFunds, the Bethesda fund company, has signed a contract with Dow Jones.

The firm has non-exclusive rights to the indices for non-leveraged mutual funds. It also has exclusive rights to the Dow Jones sector indexes for leveraged mutual funds and ETFs. ProFunds was unwilling to comment on the duration of the exclusive contract but is confident of its strategy.

"We're not talking about that publicly, but we think it's for a sufficient period of time for us to fulfill an important position in the marketplace," said ProFunds chairman Michael Sapir.

The relationship, initiated by ProFunds and facilitated by an unnamed intermediary, will bring several benefits to the fund firm.

"We were intent on offering specific products on specific economic sectors, and we investigated various companies that offered indexes off of sectors," said Sapir. "We concluded that the Dow Jones sector indexes were the best from a few different perspectives."

Sapir said that the Dow Jones indexes are easy for investment managers to replicate. Furthermore, investors easily recognize them because of exposure in media outlets such as CNBC. In addition, the indexes are listed daily in the Wall Street Journal, facilitating information access.

ProFunds brings its own position in a limited market to the table.

"There are really only three principle providers in this space, ProFunds being one of them," said Michael Petronella, Managing Director of Dow Jones Indexes. "The attraction is really they've got solid organization, they've got good people, they're quick to market, and they're one of the premier players in the leverage space."

Petronella pointed out a synergy that exists between the two companies. Both look to catch the crest of the ETF wave.

"We try to be entrepeneurial and opportunistic and we think they're similar," he said. "Exchange traded fund are the current sexy item, in terms of an investment vehicle." 

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