The NASDAQ-100 Index is a benchmark index featuring 100 of the largest and most actively traded non-financial companies listed on the Nasdaq stock exchange. It includes companies from various industries, such as technology, consumer services, healthcare, and more. This index is often used as a barometer for the performance of the technology and growth sectors.
Composition and Weighting
The NASDAQ-100 Index is a modified market-capitalization-weighted index. This means that each company’s weight in the index is determined by its market capitalization, adjusted for certain factors to prevent any single company from dominating the index.
Rebalancing
Rebalancing of the NASDAQ-100 Index occurs annually in December, with quarterly reviews. During these reviews, companies may be added or removed from the index based on their market capitalization, liquidity, and other factors.
Performance and Influence
The NASDAQ-100 Index is closely watched by investors, analysts, and fund managers as a gauge of the performance of the technology and growth sectors. Changes in the index can impact market sentiment and investment strategies, as well as the performance of funds and ETFs that track the index.
Investing in the NASDAQ-100
Investors can gain exposure to the NASDAQ-100 Index through various financial products, such as index funds, exchange-traded funds (ETFs), and derivatives. These products allow investors to diversify their portfolios and potentially benefit from the growth of leading technology and growth companies. However, it’s important for investors to conduct thorough research and consider their investment objectives, risk tolerance, and time horizon before investing in any financial product.
