An index measures the price performance of a basket of stocks/securities. An index is used as a benchmark to track the performance of a specific set of securities and compare the returns generated by a mutual fund, portfolio manager, etc. Index ETF funds are used to invest in a specific list of securities tracked by the index. For example, the Nippon India ETF Nifty BeES ETF is used to track the performance of Nifty stocks and invest in the index. Indices can be broad-based, which track the entire market, or sectoral indices which track a particular sector. The index can also be based on the market cap of the stocks they track, for example, the Nifty Small Cap 100, Nifty MidCap 100, etc.