What Is the Nasdaq-100 Index?

The Nasdaq-100 is calculated by Nasdaq and has been published since 1985. It includes 100 companies that are primarily listed on a US Nasdaq exchange and selected by their market capitalization rank. Companies classified as financial under the Industry Classification Benchmark are excluded, and there is no minimum or maximum market capitalization criterion. Ordinary shares and American depositary receipts can both qualify, and a company with several share classes can be represented by more than one security.

Weights come from a modified market capitalization: the market value of each security is used, with rules that cap the weight of individual companies and of the group of the heaviest weights, and a limit on the weight that low-float securities can carry. Membership is reviewed in an annual reconstitution each December, when eligible companies are ranked by market capitalization, and weights are rebalanced in March, June and September.

Because of the exclusion of financial companies and the selection by market capitalization, the sector mix of the Nasdaq-100 differs from that of the S&P 500, and it covers a narrower slice of the market. It is also a different index from the Nasdaq Composite, which includes the common stocks listed on the Nasdaq market and not a selection of 100. Funds and futures that track the Nasdaq-100 are separate products from the index itself.