Nasdaq 100

What does the Nasdaq 100 represent?

The Nasdaq 100 follows 100 of the largest non-financial companies listed on the Nasdaq Stock Market. The index includes businesses from technology, communications, consumer services, health care and other industries, while excluding financial companies.

It is modified market-cap weighted, so the largest constituents can have substantial influence. Although the index contains many companies, its performance can be more concentrated than the company count alone suggests.

Technology exposure and concentration

Technology-related companies have historically represented a large part of the Nasdaq 100. That gives the index exposure to areas such as software, semiconductors, digital advertising, cloud computing and consumer electronics, but it also means that changes in expectations for a relatively small group of large businesses can move the index significantly.

The Nasdaq 100 is neither inherently better nor worse than a broader index. It represents a different mix of companies, sectors and risks.

Volatility and diversification

Growth-oriented companies can be sensitive to interest rates, valuations and changing expectations for future profits. The index may therefore experience meaningful price swings in both directions.

Owning a fund linked to one index does not automatically create a fully diversified financial plan. Diversification can also involve other company sizes, regions, asset classes and personal circumstances. It reduces some risks but cannot eliminate market losses.

Testing long-term scenarios

A calculator can show what regular contributions might become under a hypothetical average return. It cannot reproduce the path of a real index, which includes rallies, declines and long periods of uneven performance. Test a range of assumptions instead of relying on a single optimistic number.