What Are The Nasdaq Composite And Nasdaq 100 Indexes? (2022)

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The second-largest stock exchange on earth, Nasdaq also operates two major stock indexes based on companies that trade on its exchange: the Nasdaq Composite and the Nasdaq 100. The Nasdaq Composite tracks the performance of more than 3,000 stocks listed on the Nasdaq while the Nasdaq 100 captures the performance of the exchange’s largest non-financial companies.

The Nasdaq Composite Index

The Nasdaq Composite Index is one of the most widely followed stock indexes in the U.S. Together with the Dow Jones Industrial Average (DJIA) and the , it’s one of the three most popular stock indexes cited by market commentators to represent how the stock market as a whole is performing on any given day. The Nasdaq Composite’s ticker symbol is IXIC. (This is the short code you can use to check its performance quickly.)

The Nasdaq Composite tracks nearly all of the companies that are listed on the Nasdaq stock exchange. To be listed on the exchange (and therefore be included in the composite), a stock must be listed exclusively on the Nasdaq stock exchange (or have been grandfathered into a dual listing) as well as be a common stock of a domestic company or be an ADR of a foreign company. No preferred stocks or exchange-traded funds (ETFs) are in the index.

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Since there is a high concentration of technology firms listed on the Nasdaq stock exchange, the Nasdaq Composite is generally considered a stand-in for the performance of the overall tech industry. Tech companies make up about 50% of the index, consumer services companies are about 20% and healthcare companies constitute about 10%. The remaining companies are in stock sectors like utilities, oil and telecommunications.

As a market-cap-weighted index, each company included in the Nasdaq Composite is weighted based on its total market capitalization, or the market value of its outstanding shares. Big companies with larger capitalizations therefore have a more significant impact on the index’s performance than smaller companies.

For example, while the Nasdaq Composite Index contains thousands of securities, just 10 companies make up 43% of its total portfolio by market cap. The top 10 companies in the Nasdaq Composite Index are:

Nasdaq Composite Performance

Over the past more than 10 years, the Nasdaq Composite has outperformed other stock market indexes. In fact, it’s beaten the S&P 500 in 11 out of the past 13 years. Its cumulative return for the period between Dec. 31, 2007, and Dec. 31, 2020, was 608%. For the same period, the S&P 500’s cumulative return was just 236%.

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While its heavy tech weighting is responsible for much of its current outsize returns, it’s also led to similarly disproportionate drops. The 2008 recession and dot-com bubble, for example, caused the Nasdaq Composite to plummet as technology companies shut their doors. But over time, it recovered and surpassed other indexes as growth-focused tech companies thrived.

The Nasdaq 100 Index

The Nasdaq 100 is much narrower in scope than the Nasdaq Composite: It tracks the 100 largest companies by market capitalization that are listed on the Nasdaq stock exchange, excluding financial sector firms. The companies tracked by the Nasdaq 100 index include more than 90% of the market capitalization of the Nasdaq Composite index. The ticker symbol for the Nasdaq 100 is NDX.

The Nasdaq 100 index uses what it calls a modified market cap weighting, although generally the largest component stocks have the biggest impact on the Nasdaq 100’s value. Nasdaq uses a somewhat complicated methodology to determine the index weighting, which primarily relies on market capitalization, plus certain other thresholds to prevent the largest stocks from having too great an impact on performance.

Much like its sister index, the Nasdaq 100 is heavily weighted toward technology industry companies, which account for more than 50% of the index’s weighting. That said, the Nasdaq Composite gives a more representative sample of all of the equities listed on the Nasdaq exchange, with a broader view of the stock market as a whole.

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The weighting of companies included in the Nasdaq 100 is rebalanced once a quarter, in March, June, September and December. Companies that no longer meet the Nasdaq 100’s rules for inclusion are replaced with new firms once a year in the third week of December.

Nasdaq 100 Performance

Like the Nasdaq Composite, the Nasdaq 100 has outperformed many other leading indexes in recent years. Over the last 10 years, for instance, it saw total returns of more than 550%, nearly double that of the S&P 500 during the same period.

Due to its heavy representation of tech stocks, however, the Nasdaq 100 suffers from many of the same sector-based weaknesses as the Nasdaq Composite. This means its overall performance may be more impacted by certain sectors, like tech, performing poorly.

How to Invest in a Nasdaq Index

The easiest way to invest in companies in the Nasdaq Composite and Nasdaq 100 is through index funds and ETFs, both of which seek to emulate the performance of particular indexes. When you buy shares of index funds and ETFs, you’re purchasing a portfolio of securities. These may contain hundreds or thousands of companies’ stocks, depending on the index you select, which instantly diversifies your portfolio.

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How to Invest in the Nasdaq Composite

There are several funds that mimic the performance of the Nasdaq Composite, including these two popular options:

  • Fidelity Nasdaq Composite Index Fund (FNCMX). The goal of this index fund is to provide results that closely mirror the price and returns of the Nasdaq Composite.
  • Fidelity Nasdaq Composite Index ETF (ONEQ). This ETF invests 80% of its assets in the component companies of the Nasdaq Composite.

How to Invest in the Nasdaq 100

QQQ and TQQQ are two of the best known ETFs that track the performance of the Nasdaq 100 Index. Both of them are among the most heavily traded and widely owned ETFs in the U.S. stock market.

The Invesco QQQ fund (QQQ) is a straightforward passive tracking ETF that attempts to duplicate the performance of the Nasdaq 100 as closely as possible. As of July 2021, it had over $180 billion in assets under management.

The ProShares UltraPro QQQ (TQQQ) is a very different animal than QQQ. It’s a leveraged ETF, meaning it takes on debt and uses advanced trading techniques to triple the daily returns of the Nasdaq 100. A 1% gain in the Nasdaq 100 would translate into a 3% gain in TQQQ while a 1% decline would mean a 3% loss for TQQQ. This sort of ETF is a very risky, highly speculative instrument. TQQQ has about $12.5 billion in assets under management as of July 2021.

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While investing in a fund that tracks a Nasdaq index has historically paid off, past performance doesn’t mean the index will continue to perform the same way in the future. It’s a good idea to consult with a financial advisor to discuss your finances and goals and to design an investment strategy that works for you.

FAQs

What Are The Nasdaq Composite And Nasdaq 100 Indexes? ›

The Nasdaq Composite Index comprises of all Nasdaq domestic and international stocks listed on the Nasdaq Stock Market while the Nasdaq 100 index is a large-cap growth index and includes 100 of the top domestic and international non-financial companies based on market capitalization.

What is the difference between NDX and QQQ? ›

QQQ used to be known as QQQQ. It is Invesco's ETF that tracks the Nasdaq 100. The Nasdaq-100 Index (NDX) is a collection of the largest 100 non-financial companies in the world listed on the Nasdaq exchange.

Is Nasdaq 100 and QQQ is same? ›

The Invesco NASDAQ 100 ETF (QQQM) is virtually identical to QQQ, affectionately dubbed the "Q mini," according to ETF Database. ​​The foundation of both ETFs is the Nasdaq 100, which provides exposure to the top 100 largest non-financial companies.

Is Nasdaq the same as Nasdaq 100? ›

The Nasdaq Composite tracks the performance of more than 3,000 stocks listed on the Nasdaq while the Nasdaq 100 captures the performance of the exchange's largest non-financial companies.

Is QQQ and nq the same? ›

In March, the Nasdaq-100 ETF (ticker: QQQ) launched and became quite successful.
...
This video is either unavailable or not supported in this browser.
BenefitNasdaq-100 Futures (NQ)Nasdaq-100 ETF (QQQ)
Management feesNone, there are no annual management fees with NQQQQ has .20% annual management fee
5 more rows

Which is better QQQ or VOO? ›

If you want a single diversified investment that may not earn as much but carries less risk, VOO may be your best. On the other hand, if you're willing to take on more risk for the chance at earning higher returns, QQQ could be a solid addition to your investments.

Which Nasdaq ETF is best? ›

The best Nasdaq 100 ETF by 1-year fund return as of 31.05.22
1Lyxor Nasdaq-100 UCITS ETF - Acc6.10%
2Lyxor Nasdaq-100 UCITS ETF - Dist6.08%
3Xtrackers Nasdaq 100 UCITS ETF 1C5.96%

What is the difference between QQQ and Tqqq? ›

TQQQ is one of the largest leveraged ETFs that also tracks the Nasdaq 100. QQQ is perhaps best-suited as a long-term investment for those who want broad exposure to the Nasdaq 100 index. TQQQ is built for short-holding periods and is best suited for day traders.

Is there a Nasdaq Composite ETF? ›

Fidelity Nasdaq Composite Index ETF (ONEQ)

The Fidelity Nasdaq Composite Index ETF (ONEQ) is one of the more unheralded Nasdaq ETFs, and it's the oldest ETF in the Fidelity stable. It tracks the Nasdaq Composite Index (COMP), which is a broader representation of Nasdaq-listed equities.

What is difference between QQQ and QQQM? ›

QQQM tracks the same index – the NASDAQ 100. The important differentiator for investors looking to buy and hold this index for the long term is the fee. QQQ has a fee of 0.20%, while QQQM is cheaper at 0.15%. If you're using a tax-advantaged account and you currently own QQQ, switch to QQQM.

What is ETF vs index? ›

The main difference between index funds and ETFs is that index funds can only be traded at the end of the trading day whereas ETFs can be traded throughout the day. ETFs may also have lower minimum investments and be more tax-efficient than most index funds.

What is the difference between Nasdaq 100 and S&P 500? ›

S&P 500 Index Versus Nasdaq 100 Performance

Nasdaq 100 has significantly outperformed S&P 500 in terms of performance. Over the past 15 years, Nasdaq 100 has delivered a CAGR of around 16%, while S&P 500 has returned about 8%.

What are QQQ holdings? ›

The Invesco QQQ ETF is a popular exchange-traded fund that tracks the Nasdaq 100 Index. QQQ stock holdings are dominated by big technology-related companies such as Apple, Amazon, Google, and Meta (formerly Facebook).

What is the difference between Nasdaq and NYSE? ›

The NYSE is an auction market that uses specialists (designated market makers), while the Nasdaq is a dealer market with many market makers in competition with one another. Today, the NYSE is part of Intercontinental Exchange (ICE), and the Nasdaq is part of the publicly traded Nasdaq, Inc.

What makes up Nasdaq-100? ›

It created two indices: the NASDAQ-100, which consists of Industrial, Technology, Retail, Telecommunication, Biotechnology, Health Care, Transportation, Media and Service companies, and the NASDAQ Financial-100, which consists of banking companies, insurance firms, brokerage firms, and Mortgage loan companies.

What is the difference between Nasdaq and Nasdaq futures? ›

As futures contracts track the price of the underlying asset, index futures track the prices of stocks in the underlying index. Nasdaq 100 contracts track the stock prices of the 100 largest companies listed on the Nasdaq stock exchange.

What is Nasdaq Mini? ›

E-mini Nasdaq-100 futures (NQ) offer liquid benchmark contracts to manage exposure to the 100 leading non-financial U.S. large-cap companies that make up the Nasdaq-100. The E-mini Nasdaq-100 futures contract is $20 x the Nasdaq-100 index and has a minimum tick of 0.25 index points.

What is the ticker symbol for Nasdaq futures? ›

Nasdaq 100 E-Mini Jun '22 (NQM22)
Barchart SymbolNQ
Contract Size$20 times Index
MonthsMar, Jun, Sep, Dec (H, M, U, Z)
Trading Hours5:00p.m. - 4:00p.m. (Sun-Fri) (Settles 3:00p.m.) CST
Value of One Futures Unit$20
8 more rows

Should I buy VTI or VOO? ›

Over very long periods of time, VTI can be expected to perform very similarly to VOO, but with higher volatility. Because 82% of VTI is VOO, its performance is still highly correlated to the S&P 500. The remaining 12% of mid- and small-cap stocks adds some volatility, which can boost returns but also increases risk.

What ETF is comparable to QQQ? ›

Invesco launched QQQM with one express purpose in mind - offer a cheaper alternative to QQQ. The original QQQ comes with an expense ratio of 0.20%, but QQQM is 5 basis points cheaper, charging 0.15%.

What is the most popular ETF? ›

Most Popular
  • #1. SPDR® Portfolio Corporate Bond ETF SPBO.
  • #2. Schwab 5-10 Year Corp Bd ETF SCHI.
  • #3. SPDR® Portfolio Interm Term Corp Bd ETF SPIB.

Is there a Nasdaq-100 Index fund? ›

The USAA Nasdaq 100 Index Fund tracks the Nasdaq-100 Index, a tech-heavy benchmark. According to USAA, the fund will invest at least 80 percent of its holdings in the stocks that comprise the index. As with any index fund, this fund will do as well or as poorly as the underlying index.

Is there a vanguard Nasdaq index fund? ›

Vanguard Index Trust Growth Index Fund (VIGRX) Latest Prices, Charts & News | Nasdaq.

How do you buy the Nasdaq composite index? ›

If you want to invest in the NASDAQ Composite Index, you can do so in just three steps:
  1. Identify target NASDAQ index investment. Decide what makes the most sense for you: investing in mutual funds or ETFs. ...
  2. Buy shares with your IRA or 401(k) ...
  3. Open a brokerage account.
May 24, 2022

Is Tesla in the QQQ? ›

Invesco QQQ is an exchange-traded fund that tracks the Nasdaq-100 Index™ and features Apple, Google, Microsoft, and more.
...
All QQQ holdings.
CompanySectorAllocation
Tesla IncConsumer Discretionary3.88%
Alphabet Inc Class CCommunication Services3.62%
107 more rows

What's the difference between QQQ and Sqqq? ›

The ProShares Short QQQ (PSQ) returns the inverse of the index on a one-to-one basis. The ProShares UltraShort QQQ (QID) is a 2x inverse ETF, and the ProShares UltraPro UltraShort QQQ (SQQQ) is a 3x inverse ETF. The more leverage you have (i.e., 2x or 3x), the more the price movements will be amplified.

What is ProShares Ultra QQQ? ›

ProShares UltraShort QQQ seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the Nasdaq-100 Index®.

Does Vanguard have a QQQ equivalent? ›

VGT and QQQ are very similar investments. VGT offers more diversification since it holds about 3 times as many stocks. However, this hasn't made a difference in their performance since they have both had virtually the same returns over the last 10 years.

Does QQQ track Nasdaq? ›

Invesco QQQ is an exchange-traded fund (ETF) that tracks the Nasdaq-100 Index™. The Index includes the 100 largest non-financial companies listed on the Nasdaq based on market cap.

What Vanguard ETF tracks the Nasdaq? ›

Vanguard Information Tech ETF (VGT) Latest Prices, Charts & News | Nasdaq.

What ETF tracks Nasdaq? ›

PowerShares QQQ (QQQ)

Known as “the Qubes”, Invesco's PowerShares QQQ (NASDAQ:QQQ) is one of the largest and oldest ETFs tracking the Nasdaq 100 Index. The PowerShares QQQ will generally hold all stocks included in the index, the fund's underlying index.

What's the difference between SPY and VOO? ›

Which is Better VOO or SPY? SPY and VOO are very similar investments because they track the same index. However, VOO is better because it has a lower expense ratio of only 0.03%. VOO can also be purchased commission-free through Vanguard, which is the brokerage I prefer to use.

Is S&P 500 an ETF or index fund? ›

The S&P 500 was the benchmark of the first index fund and the first exchange-traded fund (ETF). An S&P 500 ETF is an inexpensive way for investors to gain diversified exposure to the U.S. stock market.

Is S&P 500 an index fund? ›

S&P 500 funds are by far the most popular type of index fund. But index funds can be based on practically any financial market, investing strategy, or stock market sector. Index funds are popular with investors for a number of reasons.

Which is the best index fund? ›

Best Index Funds
  • IDFC Nifty Fund Direct Plan Growth. ...
  • Tata Index Fund Nifty Direct Plan. ...
  • UTI Nifty Index Fund-Growth Option- Direct. ...
  • ICICI Prudential Nifty Index Plan Direct Growth. ...
  • DSP Equal Nifty 50 Fund Direct Growth. ...
  • Taurus Nifty Index Fund-Direct Plan-Growth Option. ...
  • Sundaram Nifty 100 Equal Wgt Dir Gr.

Are all Nasdaq-100 companies in the S&P 500? ›

Does the S&P 500 lnclude Nasdaq Stocks? Yes, the S&P 500 is composed of 500 of the largest companies traded on the NYSE, Nasdaq, and Cboe.

What is a blue chip index? ›

What Is a Blue-Chip Index? A blue-chip index is an index that tracks the shares of well-known and financially stable publicly traded companies known as blue chips.

Is S&P 500 the same as Nasdaq? ›

The S&P 500 tends to be broader, hoping to have a bigger representation of companies from various sectors and industry groups. And the Nasdaq composite includes only stocks that are traded on the Nasdaq market.

Does QQQ have Costco? ›

ETF.com Insight

Costco Wholesale Corporation is a company in the U.S. stock market and it is a holding in 276 U.S.-traded ETFs. COST has around 42.3M shares in the U.S. ETF market. The largest ETF holder of COST is the Invesco QQQ Trust (QQQ), with approximately 6.30M shares.

Does QQQ pay dividend? ›

Invesco QQQ Trust (QQQ)

QQQ has a dividend yield of 0.57% and paid $1.74 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Mar 21, 2022.

Is AMD part of QQQ? ›

Advanced Micro Devices, Inc. is a company in the U.S. stock market and it is a holding in 290 U.S.-traded ETFs. AMD has around 154.3M shares in the U.S. ETF market. The largest ETF holder of AMD is the Invesco QQQ Trust (QQQ), with approximately 23.14M shares.

Is Apple listed on NYSE or NASDAQ? ›

What exchange does Apple stock trade on? Apple stock is traded on the NASDAQ Global Select Market under the ticker symbol AAPL.

Is Robinhood NYSE or NASDAQ? ›

Online brokerage firm Robinhood offered its stock Nasdaq exchange under the ticker "HOOD" for $38 a share. The company is selling upward of 57.9 million, with its founders and CFO selling another 2.6 million shares between them.

Can a stock be listed on both NYSE and NASDAQ? ›

A company can list its shares on more than one exchange, which is often referred to as a dual-listing. A stock can trade on any exchange in which it is listed. However, companies must meet all of the exchange's listing requirements and pay for any associated fees in order to be listed.

Can a company be in both the Dow and S&P? ›

Definition and Example of S&P 500, Nasdaq, and the Dow

The stocks in the S&P 500 represent roughly 75% of all publicly traded stocks. “S&P” stands for the market research firm Standards and Poor's. 1 Companies can be listed in more than one index, and some of the largest companies in the S&P 500 also are in the Dow.

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