A stock index fund, for example, owns shares of the component stocks that make up the index that it tracks, and fund investors own a proportional stake in all of those stocks. There are thousands of index funds, and they vary greatly according to the indexes they track. Index funds are available for a wide range of investments beyond stocks, including bonds, commodities, and real estate investments. Some stock index funds own just a small number of stocks, while others own thousands of different stocks. Regardless of which index they track, the primary objective of an index fund is to match the performance of the underlying index. Index funds have fund managers whose job it is to ensure that the fund tracks its underlying index. Because an outside third party index provider creates and maintains the index itself, the job of the fund manager is relatively simple: buy the investments that the index provider puts in the index, and then make further purchases or sales when the index provid...