A measurement of a market
An index is a calculated measure designed to track the performance of a defined group of investments. The group might represent a broad market, an industry, a style, or another segment.
Rules define the group
An index uses stated rules to determine which securities qualify and how much weight each security receives. Those rules make the index repeatable and measurable.
An index is not an investment
You generally do not buy an index directly. Instead, funds and other products may be designed to track it so investors can obtain exposure to the market segment it represents.