Key facts
- The Nasdaq 100 index comprises the 100 largest non-financial companies listed on the Nasdaq exchange.
- Technology companies represent more than half of the index's constituents.
- Direct investment in the Nasdaq 100 is not possible; exposure is gained through funds or individual stocks.
- Exchange-traded funds (ETFs) are a common method for investors to track the Nasdaq 100's performance.
The Nasdaq 100 is a prominent stock market index that tracks the performance of the 100 largest non-financial companies listed on the Nasdaq exchange. Due to its significant weighting in technology, it is often viewed as a benchmark for large, growth-oriented companies, particularly within the tech sector. Companies qualify for inclusion based on market capitalization, provided they are not classified as financial institutions. Technology firms make up more than half of the index, meaning their performance heavily influences the Nasdaq 100's overall movement. Other sectors represented include health care, retail, and telecommunications. While direct investment in the index is not possible, investors can gain exposure by purchasing shares of individual companies within the index or, more commonly, by investing in exchange-traded funds (ETFs) designed to replicate the index's performance. These ETFs pool investor capital to acquire a basket of securities that trade on an exchange throughout the day.