Understanding the NASDAQ-100: A Guide to the Tech-Heavy Index

NAS 100

The NAS 100 (also known as NDX, NDX100 or US100), often referred to as the Nasdaq 100, or simply the ‘Nasdaq’ for short, is a market capitalisation-weighted index comprising 101 stocks issued by the largest 100 non-financial companies traded on the Nasdaq stock exchange.

Launched in 1985, the base price of the index was initially 250, however this was halved in the early-1990s. Foreign firms were first admitted to the index in 1998.

In contrast to the US 500, the Nasdaq is limited solely to securities listed on one exchange, its namesake, while also excluding any companies in the financial services sector, which are listed in a separate index.

Stringent Selection Criteria

The NAS 100 uses stringent selection criteria. Beyond the exchange where a company's shares trade, factors like average daily trading volume and a minimum three-month listing requirement on an "established US market" come into play. Previously, stocks in the index were also limited to a single share class, though this requirement has since been relaxed. The NAS 100 is typically rebalanced on an annual basis, in December, when constituents are amended, and other appropriate adjustments are made.

In a similar manner to the US 500, the NAS 100 has displayed strong historical performance of late, albeit with higher volatility, befitting of its high-beta, tech-heavy nature. It's important to remember that past performance doesn't guarantee future results, and careful research is crucial before making any investment decisions.

The weightings of the top 50 index constituents can be found below, as of the time of writing: