InĀ finance, aĀ stock index, orĀ stock market index, is anĀ indexĀ that measures aĀ stock market, or a subset of the stock market, that helpsĀ investorsĀ compare currentĀ stockĀ price levelsĀ with past prices to calculate market performance.
Two of the primary criteria of an index are that it isĀ investableĀ andĀ transparent:Ā The methods of its construction are specified. Investors can invest in a stock market index by buying anĀ index fund, which are structured as either aĀ mutual fundĀ or anĀ exchange-traded fund, and “track” an index. The difference between an index fund’s performance and the index, if any, is calledĀ tracking error. For a list of major stock market indices, seeĀ List of stock market indices.
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