An Analysis of the Nasdaq-100’s Evolution Through Three Market Crises
It may seem counterintuitive that the U.S. stock market has continued to set record highs through the uncertainty and unpredictability of the global pandemic. Yet the records keep breaking. This is particularly true of the Nasdaq-100 Index® (NDX®), which was up a staggering 47.6% in 2020, and 48.9% on a total return basis.
Throughout this time, the index compares favorably with other broad-based indexes. However, that was not the case during the prior two periods of severe market disruption in the past two decades: the Tech Bubble/Bust at the turn of the century and the Financial Crisis of 2008/2009.
By examining NDX index performance over the course of three distinct market crises, one can gain an understanding of how the Nasdaq-100 has evolved and, ultimately, explain why it has outperformed so dramatically this time around.
Among the factors Nasdaq looked at were:
- NDX performance
- Annualized returns over a 26-year period
- Growth of fundamentals
- How the index has become a bigger part of the U.S. stock market
- How NDX overlaps with S&P 500
- Changing correlations of NDX with the broader market
- Ongoing maturation of NDX
Most crucially, the profound improvement in the fundamentals underlying the index proves that the Nasdaq-100 now tracks largely mature companies that, with a market cap of $15T, not only comprise a substantial portion of the overall U.S. equity market but collectively represent the new economy of the 21st century.
Our newest NDX white paper examines the index’s evolution and why it has outperformed so dramatically throughout the Covid crisis.
You can read more about the Nasdaq-100 Index and various ways to invest in it on our website Nasdaq.com/Nasdaq-100.
Nasdaq® is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.
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Nasdaq Index Research Team
Nasdaq
Nasdaq calculates more than 40,000 diverse indexes, providing coverage across asset classes, countries and sectors.
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