A portfolio of stocks selected to match a stock market index number, usually the Standard & Poor's Industrial Index or the Standard & Poor's Composite Index. The guiding principle is creation of a proxy for the selected index since the index itself contains an unmanageably large number of stocks.

An index consisting of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe.

Companies included in the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor's. The S&P 500 is a market-value weighted index - each stock's weight in the index is proportionate to its market value.