NASDAQ 100

A market-capitalization-weighted stock index composed of 100 large non-financial companies listed on NASDAQ, representing technology and growth stocks.

NASDAQ 100

Overview

The NASDAQ-100 is a stock index composed of the top 100 companies by market capitalization among non-financial companies listed on the U.S. NASDAQ stock exchange. It began calculation with January 31, 1985 as its base date (index value 100), and is widely used as a benchmark representing the trends of U.S. technology and growth stocks. Unlike the NASDAQ Composite, its key characteristics are that financial sector stocks are excluded and that the weight of a small number of large-cap stocks is extremely high.

Key Details

Calculation Method and Basis

  • Base date: January 31, 1985, base value 100
  • Calculation method: Modified market cap weighted. Weight cap rules are applied to prevent excessive concentration in specific stocks.
  • Rebalancing: Regular adjustments four times a year (March, June, September, December), with special adjustments as needed.
  • Financial sector stocks (banking, securities, insurance, asset management, etc.) are excluded from eligibility.
  • In principle, only NASDAQ-listed stocks are included, though exceptionally some non-NASDAQ stocks may be included.

Eligibility Requirements

  • Common stocks listed on NASDAQ (preferred stocks, ETFs, closed-end funds, and some ADRs excluded)
  • Meeting minimum average daily trading volume requirements
  • Meeting free-float ratio and market capitalization criteria
  • Meeting financial soundness and continued listing requirements
  • Newly listed stocks are considered for inclusion after a certain period of time.

Sector Composition and Representative Stocks

Information technology, communication services, and consumer discretionary account for overwhelmingly high proportions. Representative stocks include Apple, Microsoft, NVIDIA, Amazon, Alphabet (Google), Meta, Tesla, and Broadcom. The top 10 stocks often account for more than half of the index's total market capitalization, so price movements in a few mega-cap stocks significantly move the entire index. On the other hand, the weights of industrials, consumer staples, energy, and healthcare are relatively low.

Investment Vehicles

  • ETFs: Invesco QQQ (Invesco QQQ Trust) is the most representative, and many ETFs tracking the NASDAQ 100 are also listed in Korea (e.g., TIGER US NASDAQ 100 (TIGER 미국나스닥100), KODEX US NASDAQ 100TR (KODEX 미국나스닥100TR), etc.).
  • Derivatives: NASDAQ 100 futures (NQ), micro futures (MNQ), options
  • Leveraged and inverse products: During periods of heightened short-term volatility, compounding effects can cause long-term performance to deviate significantly from the underlying index.
  • Since performance differences arise between currency-hedged and unhedged products, investors should choose according to their investment objectives.

Index Characteristics and Risks

  • Growth/tech stock concentration: Reacts sensitively during periods of rising interest rates and monetary tightening.
  • Exchange rate fluctuations: KRW-based investors are exposed to USD/KRW exchange rate risk.
  • Concentration risk: High dependence on a small number of top stocks makes the index vulnerable to negative news about individual companies.
  • Dividend yields tend to be low, with a performance structure centered on capital gains.
  • Volatility tends to be greater than that of the S&P 500, so declines can be amplified in bear markets.

Latest Trends

  • In 2024–2025, AI-related stocks such as NVIDIA led the index's rise, driven by demand for AI semiconductors and infrastructure.
  • The timing of Federal Reserve rate cuts and the trajectory of inflation indicators acted as key variables for index volatility, and valuation adjustments in tech stocks were repeated in response to changes in rate expectations.
  • The net asset size of ETFs tracking the NASDAQ 100 has grown to record highs, and inflows from individual investors and pension accounts have expanded.
  • In Korea, buying of NASDAQ 100 ETFs using pension savings and ISA accounts continues steadily, and performance differences between currency-hedged and unhedged products are being highlighted.
  • Big Tech's expansion of its own AI infrastructure investment and growth in cloud and advertising revenue are evaluated as key drivers of the index's earnings growth.
  • The application of weight cap rules to ease concentration within the index and the results of regular rebalancing have emerged as points of investor interest.

Related Topics

  • [[NASDAQ]]
  • [[S&P 500]]
  • [[QQQ]]
  • [[NVIDIA]]
  • [[ETF]]
  • [[Tech Stocks]]