An index fund is a type of collective investment program. It is a specific type of mutual fund that spreads its investments across one stock market index. A stock market index is simply one section of the stock market. The actual trading and placement each of an index funds' stocks is often completed by computer programs. An index fund is meant to maintain the averages of the given index it was created for. In this manner, index funds will never greatly outperform the market; however, they should never underperform either, unless the whole of the chosen index produces losses. With this, costs are low because of little management and low risk.