Index guideUnited States

The Nasdaq-100

The index people mean when they say "the Nasdaq" — 100 non-financial companies, weighted by size within limits, and the only major US benchmark with a written trigger for emergency de-concentration.

1985Launched

100Constituents

Modified capWeighting

DecemberReconstitution

The Nasdaq-100 launched in 1985 alongside a financial-sector companion index, and the split has survived: this one excludes financial companies by design. It covers the largest non-financial businesses listed on the exchange, which in practice means technology, consumer platforms, biotechnology and communications.

It is distinct from the Nasdaq Composite, which includes every security on the exchange and runs to several thousand constituents. Almost all the futures, options and tracking funds that people describe as "trading the Nasdaq" reference this index rather than the Composite.

Modified weighting, and the trigger

Constituents are weighted by market capitalization, but not purely. The methodology imposes limits on how much any single company — and how much the largest group collectively — may represent, and applies them at scheduled rebalancing.

What makes the index unusual is that the rules include a mechanism for acting between scheduled reviews. When the combined weight of the largest constituents passes a defined threshold, a special rebalance can be triggered to redistribute weight across the rest of the index.

A concentration circuit breakerHow the special rebalance works

Schematic. Thresholds and the redistribution formula are set in the index methodology and have been revised; check the current rules with Nasdaq before relying on specific figures.

This has been invoked. When the largest technology companies grew far faster than the rest of the index, their combined weight reached the level at which the methodology permits intervention, and weights were reset outside the normal December schedule.

It is worth setting against the S&P 500, which has no equivalent. Ten companies there exceed a third of the index with nothing in the rules to prevent it. The Nasdaq-100 — the more concentrated index by reputation — is the one with a written brake.

Why exclude financials? The index was launched as one of a pair, with a separate financial index covering banks and insurers. That original division persists, which is why an index widely treated as a technology benchmark is more accurately described as a non-financial one.

Facts worth knowing

Reconstituted annually in DecemberWith eligibility based on size and liquidity, alongside quarterly weight adjustments.
Non-financial, not technologyThe exclusion is of financial companies. Consumer, healthcare and industrial businesses qualify and are present.
Foreign companies are eligibleA Nasdaq listing is the requirement, not US domicile.
There is no profitability testUnlike the S&P 500, which requires positive earnings for admission.
It moves closely with the CompositeBecause both are capitalization weighted and the same handful of very large companies dominate each.

Common questions

Nasdaq-100 or Nasdaq Composite?

The 100 for trading and tracking; the Composite as a broad measure of the exchange. They move closely together because the largest companies dominate both.

Why are there no banks in it?

Financial companies are excluded by the index's original design, which paired it with a separate financial-sector index.

What is a special rebalance?

An off-schedule adjustment permitted when constituent concentration passes a threshold set in the methodology. Weights are redistributed; membership does not change.

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