Today is a very special day for one of our favorite index-NASDAQ-100 Index® is turning 40 years old!
In the last four decades, the index has become one of the most popular benchmarks for trade and investment products in the world. The Nasdaq-100® stock has a market cap of over $ 27 trillion as 2024 at the end of the year. Investors can purchase products tracking NASDAQ-100 using stock, ETF, options and futures. (Note that there are many other product types that track the NasDaq-100, including, but not limited to structured products and annuities. For simplicity, we do not add other product types to the liquidity analysis mentioned in the document Are.) Trade more than $ 620 billion each day.
Nasdaq-100 born
The Nasdaq-100 should not be confused with the Nasdaq Composite® index. The NASDAQ Composite Index represents each company listed on the NASDAQ, and was launched in 1971 in combination with the launch of NASDAQ Share Market®.
Nasdaq-100 was born on 31 January 1985. It is designed to represent the top 100 (non-citizens) shares listed on NASDAQ. At that time, the market cap was a total of $ 58 billion. Today, with most of the world’s largest stocks in the NASDAQ-100 index including AAPL, AMZN, NVDA and Goog, it is a shocking in $ 27 trillion.
Interestingly, a separate index, NasDaq Financial -100Tm The index also started on that date, and it still exists today.
14% compound returns from more than 500 companies
Since its inception, the Nasdaq-100 is about 20,000% above December 31, 2024. This is an impressive 14.25% per year based on a compound return compared to 11.57% in S&P 500 at the same time. It is even more impressive that the poster for the index take bubble was the child – where the index bubble burst as 83%. It seems that there is a lot to say about the benefits of long -term investment.
Chart 1: NASDAQ-100 Index Return Since Installations with QQQ performance and assets
With all the index, components also change over time. IPOs form new companies, which are added to merger and change small companies. In the last 40 years, the Nasdaq-100 has organized more than 500 different companies at different times. In fact, only six of the original companies are still in the index: Apple, Micron Technology, Intel, Kla-Sencor, Pacar And Costco,
Nasdaq is home for many innovative development companies
One of the reasons for the better performance of the Nasdaq-100 index over time is that most of the largest, rapidly growing technical stocks on the world list on Nasdaq.
However, the weight of technical shares in the Nasdaq-100 has changed with a classification of the ICB region. It ranges from 25% to about 70%. And the leadership from other regions has also changed over time, consumer services/discretionary, with telecommunications and health care are all at different points over time over time. (Note that ICB changed its industry classification system and NASDAQ implemented those changes that began in 2021. As a part of that change, the consumer service industry retired, and consumer discretionary industry existence Come.) Many companies in those areas are also domestic. Names including Pepsi, Starbucks, CostCo, Honeywell, Gilliad, Majen and Bioogen.
Chart 2: Nasdaq-100 tech sector weight over time
Nasdaq-100 better performance since financial crisis
Since the end of the financial crisis, the Nasdaq-100 has performed better for another period. It exceeds 10 times, by defeating other American and international sequences. However, it is appropriate to say that this time things are different, as the companies of NASDAQ-100 have also increased better income-recently thanks to the building Artificial Intelligence (AI) Hardware and Software.
Chart 3: The end of the financial crisis aligns with an increase in display income
Risk to global economy
In the Nasdaq-100, 100 companies can list us all, but they actually represent the global economy.
First, because the Nasdaq-100 includes adrs, it includes companies that some indexes belong to other countries. At the end of 2024, the NASDAQ-100 had 10 “non-American” companies, with about 4%weight in the index-non-interest Hand, LindeAnd Astrazeneca.
In addition, almost all companies in the index have global products and workforces. The factset reports that about half of the NASDAQ-100 revenue is from other countries, with significant revenue coming from Asian countries.
Chart 4: About 50% of the income of the component company are from abroad
Racism
The NASDAQ-100 index does not represent a huge ratio of the largest companies and a benchmark for financial products in the world-it has also become a benchmark with some liquid trading vehicles.
The launch of NDX Options (in 1994), NDX Futures (in 1996) and CUCUCU ETF (1999) allowed investors to capture the returns of the NASDAQ-100 index. Over time, more, more, more diverse investment are added – by using income and safety options from Leword ETF to ETF.
Combined with trading in NASDAQ-100 companies, adds more than total liquidity in the NASDAQ-100 index $ 620 billion Each day, coming from:
- 100 stocks In the index, who trade all around $ 173 billion each day.
- Dozens of ETFs Use the Nasdaq-100 benchmark. United, around these trade $ 23 billion each day.
- Nasdaq-100 futures Business $ 201 billion each day.
- Option On shares, the NASDAQ-100 index or NASDAQ-100 tracking ETF. These trade surrounding $ 113 billion Based on a delta-dated exposure each day.
Chart 5: Liquidity in NASDAQ-100 Ecosystem adds more than half trillion dollars per day to trading
Happy birthday Nasdaq-100!
It is an index that has taken investors and traders captive over years. This includes some of the greatest brands of the US because because of this, the industry has made ways to buy NASDAQ-100 portfolio of companies for investors.
In turn, investors help in funding innovation that bring companies to the global economy, and allow investors to participate in their revenue development as the products are sold to consumers around the world.
It is really quite surprising that it has achieved all this in only 40 years.
