Let’s say I want to track the STI. I would buy a bunch of shares from many different companies, and create a basket of stocks. This basket would be a microcosm, or miniature, of the STI (not technically correct, but a close enough example). When the STI as a whole makes money, my miniature version should as well. And vice versa when it goes down. Now, remember that the STI is composed of many different companies. For it to slide, the majority of those companies would have to make a loss. That’s not impossible, but it’s improbable that so many companies go tumbling downhill at once.