Stock market index

In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance.

Two of the primary criteria of an index are that it is investable and transparent: The methods of its are specified. Investors can invest in a stock market index by buying an index fund, which are structured as either a mutual fund or an exchange-traded fund, and “track” an index. The difference between an index fund’s performance and the index, if any, is called tracking error. For a list of major stock market indices, see List of stock market indices.