The Nasdaq-100 consists of a basket of the 100 largest and most actively traded companies in the US. In this blog, we will take a look at five things to know about the Nasdaq-100 index.

1. It includes some of the most innovative companies in the world

The Nasdaq-100 includes companies that are at the forefront of innovation. Apple, Microsoft, Amazon, Alphabet, Intel. Meta, Starbucks, and Tesla are all Nasdaq-100 companies. The list goes on. These are companies that are leaders in their field and are constantly innovating to stay ahead of the curve.

2. It does not include any company from the financial industry

Nasdaq-100 only allows non-financial companies to be listed on it, unlike the S&P 500. Also at present, the index does not include any Utilities, Oil & Gas, and Basic Materials companies. Interestingly, there is a sister index, the Nasdaq Financial 100 that consists only of financial stocks. Both the indices debuted together in 1985. In the initial years, the focus was more on the Nasdaq Financial 100 index. But over the years, with growth in tech companies, the Nasdaq-100 is now more popular.

3. It is weighted based on modified market capitalization

The Nasdaq-100 is a modified market capitalization-weighted index. So, even though it relies on market capitalization, certain thresholds are in place when determining how the index is weighted, so that the largest companies do not skew the index. Each quarter, the index is rebalanced accordingly.

4. It includes foreign stocks as well

Unlike the S&P 500, the Nasdaq-100 includes foreign stocks as well. Baidu from China, Ryanair from Ireland, Garmin from Cayman Island, and Infosys from India are some of the foreign stocks that are part of the Nasdaq-100. Infosys was the first Indian company to be added to the Nasdaq-100.  

5. You can invest in the Nasdaq-100 through ETFs

An easy way to invest in the Nasdaq-100 is through ETFs that track the index. The Invesco QQQ ETF is one of the best-known ETFs that tracks the Nasdaq-100 index. The ETF gives you exposure to all the 100 largest non-financial companies through a single investment.

As we have seen, the Nasdaq-100 index gives investors the opportunity to invest in some of the most innovative companies in the world . Find more details on how to invest in Nasdaq from India here. 

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Our team members at Vested may own investments in some of the aforementioned companies/assets. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor’s portfolio. Note that past performance is not indicative of future returns. Investing in the stock market carries risk; the value of your investment can go up, or down, returning less than your original investment. Tax laws are subject to change and may vary depending on your circumstances.

This article is meant to be informative and not to be taken as an investment advice, and may contain certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success or lack of success of particular investments (and may include such words as “crash” or “collapse”). All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.

This video is meant to be informative and not to be taken as an investment advice and may contain certain “forward-looking statements” which may be identified by the use of such words as “believe”, “expect”, “anticipate”, “should”, “planned”, “estimated”, “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success of or lack of success of particular investments (and may include such words as “crash” or “collapse”.) All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.

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