Insight

Nasdaq-100 Index: Where some of the biggest innovators live

Invesco
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Where can you go to find the world’s most iconic companies, enterprises that have become synonymous with growth and innovation? Where are the companies that are producing groundbreaking developments in areas such as electric vehicles, artificial intelligence, cloud computing, social media and e-commerce?

You won’t find all these companies in Silicon Valley, Seattle, Austin or any other tech hub. For access to the category-defining companies at the forefront of innovation, consider the Nasdaq-100 Index. 

Home to tech giants and more

The Nasdaq-100 is an index that tracks the 100 largest non-financial companies by market capitalization listed on the Nasdaq. This group includes many of the world’s leading technology companies—household names such as Apple, Microsoft, Alphabet (Google’s parent company), Intel, Facebook, Zoom and Tesla. It’s not surprising that some of the most prominent technology companies choose to list their stocks on the Nasdaq, the first all-electronic exchange.

But the Nasdaq-100 is home to more than just the world’s leading technology companies. About one-third of the index is represented by companies outside the information technology or communication services sectors. This includes innovative healthcare companies such as Moderna, whose mRNA technology is at the heart of the company’s lifesaving COVID-19 vaccine. It also includes cutting-edge companies such as Netflix and Electronic Arts, as well as top consumer brands like Starbucks, Costco, Dollar Tree, PepsiCo, lululemon athletica, Walgreens Boots Alliance and Align Technology (makers of Invisalign orthodontics).

Performance driven by innovation

The Nasdaq-100 has significantly outperformed the S&P 500 (a broad measure of the U.S. stock market) for more than a decade. From February 28th, 2014, to February 29th, 2024, the cumulative total return of the Nasdaq-100 was more than 2.4x that of the S&P 500. 

Nasdaq-100 vs. S&P 500: Total return 28/02/14 to 29/02/24

  NASDAQ-100 S&P 500
Cumulative Return 545% 224%
Annualized Return 20.47% 12.47%
+Annualized Volatility 23.13% 18.13%

Bloomberg L.P. data as 29/02/2024. Performance quoted is past performance and cannot guarantee of comparable future results. An investor cannot invest directly in an index. Index returns do not represent Fund returns. Past performance does not predict future returns.

Why has the Nasdaq-100 performed so well relative to the broader U.S. stock market? A major reason is because the Nasdaq-100 has been heavily allocated toward top-performing industries such as technology, consumer services and healthcare. It is important to note, however, that these high-growth industries tend to be more volatile than other industry sectors.

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Why consider investing in innovation?

Our EQQQ Nasdaq-100 UCITS ETF, launched in 2002, offers diversification across sectors within the US large-cap space. Access the 100 largest non-financial companies listed on the Nasdaq Stock Exchange with our ETF.

 

We also offer a range of Nasdaq UCITS ETFs offering exposure to growing companies with strong fundamentals. Our range offers access to disruptive technologies, revolutionary giants, and household names from a range of different sectors, helping provide investors with unique diversification benefits within the US large- and mid-cap equity space. 

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Investment risks

  • The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested. 

Important information

  • Data as at 31 March .2024, unless otherwise stated. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.

    EMEA 3228067 /2023