Glossary entry
The Nasdaq-100 tracks 100 of the largest eligible non-financial companies listed on the Nasdaq Stock Market. Its rules determine membership and modified market-capitalization weights. It includes several industries, although large technology-related businesses can have substantial influence. The index differs from the Nasdaq Composite, which covers a broader set of Nasdaq-listed securities.
Illustrative example
If several heavily weighted constituents move in the same direction, they can dominate the index's result even when many other members show smaller opposite moves.
What to consider
One hundred companies do not imply equal diversification. Review sector concentration and constituent weights before treating the index as a broad-market substitute.
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