An index is a hypothetical basket of stocks, so it cannot be invested in directly. But, there are thousands of investment products that track indexes available through product providers and fund issuers including mutual funds, ETFs, and derivatives. Index-tracking investments are different from actively managed investments in that, rather than making active investment decisions in an attempt to outperform a particular market or market segment, they aim to closely mimic an index by holding the same securities at the same weight as the index.

Within index-tracking products, which are also referred to as “passively-managed,” the index provider calculates and publishes the index, and the product issuer licenses the rights to create the investment product based on the index. The product issuer manages the investment inflows and outflows, lists the product on an exchange (or otherwise makes it available for purchase), and markets/distributes the product.