What is an index? An index is designed to represent a measure the performance of a specific Market asset class sector or investment strategy. For example, one of the best known indexes is the S&P 500 which tracks the performance of the 500 largest US Stocks by market capitalization. However, unlike individual Securities financial markets indexes are a theoretical measure and cannot be invested in directly instead investors who wish to earn the return of an index need to use a financial product such as an index fund which is designed to track the performance of a designated index less any fees that the fun charges An index can be thought of as a portfolio of Securities with the value of the index representing the value of that portfolio. However, this value is not quoted in any currency value instead. It is quoted in index points and the percentage change in the index is the percentage change day over day in the value of a portfolio made up of the constituents of the index. As a result the return of the index represents the weighted average of the individual constituent returns within the index. Although the industry's initial indexes were Equity indexes starting with the Dow Jones Transportation average in 1884. There are now millions of indexes covering all major asset classes countries industry sectors and investment themes. Indexes can be broad like the msci world which covers over 1500 stocks in more than 20 developed countries. Or they can track more narrow segments of the market for example specific sectors such as technology or utilities. Or they could track asset classes including US government bonds or real estate or even themes including clean energy or digital security.