A more thorough explanation:

An index fund is a type of mutual fund that invests in the stock of companies that make up a specific market index, such as the Standard & Poor's 500 stocks. This means that the fund tracks the stock average of the index it is invested in.

For example, if an index fund is invested in the S&P 500, it will invest in the 500 companies that make up the index. This means that the performance of the fund will closely mirror the performance of the index.

Another example is the Vanguard 500 Index Fund, which is invested in the 500 largest companies in the United States. This fund is designed to track the performance of the S&P 500 index.

Index funds are a popular investment option because they offer low fees and are easy to understand. They are also a good way to diversify your portfolio because they invest in a large number of companies. By investing in an index fund, you can get exposure to the stock market without having to pick individual stocks.