The NASDAQ 100 index represents the 100 largest non-financial NASDAQ-listed stocks by market capitalisation.
During the infamous ‘dot com boom in 1999-2000, the NASDAQ was followed particularly closely as many of the new economy companies like Amazon and Google, as well as hardware manufacturers like Dell and Intel, are included in the NASDAQ 100.
The index is re-adjusted on a quarterly basis, but the emphasis is on reflecting the economic importance of the constituent companies, many of which are large corporations in the fields of technology, bio-science and retail.
The index has a reputation for being heavily laced with technology companies and firms which have grown up recently, rather than the more established shares investors will find on the New York Stock Exchange. Amongst the big names in the index can be found Apple, Cisco Systems, Genzyme and Yahoo!, as well as non-technology game changers like Starbucks.
When looking for a trading product that tracks the index, you will frequently find it using the word ‘tech’ in its name rather than simply ‘NASDAQ’ due to licensing issues. Again, this is due to the perceived bias towards technology and bio-technology companies in the index.