Stock market index

In finance, a stock index, or stock market index, is an index that measures the performance of a stock market, or of a subset of a stock market. It helps investors compare current stock price levels with past prices to calculate market performance.^[1]

Two of the primary criteria of an index are that it is investable and transparent:^[2] The methods of its construction are specified. Investors may be able to invest in a stock market index by buying an index fund, which is 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.