Nasdaq Composite® Index
A Broad Measure of Market Performance
Unlocking Global Potential, Driving Innovation, and Nurturing Prosperity
What is the Nasdaq Composite®?
The Nasdaq Composite® is a stock market index composed of thousands of stocks listed on the Nasdaq Stock Market, with a particular emphasis on technology-related companies. Established in 1971, it is known for featuring a wide range of companies—from established giants like Apple and Microsoft to smaller, fast-growing firms—reflecting a broad cross-section of the U.S. technology sector. The index is market capitalization-weighted, meaning that larger companies have a greater influence on its overall performance, and it is commonly used as a benchmark to gauge the health and trends of the technology-driven segments of the American economy.
>> Download the Nasdaq Composite Fact Sheet
>> Read the Nasdaq Composite Methodology
How the Nasdaq Composite® Helps You
Financial Advisors
For financial advisors, the Nasdaq Composite® offers a comprehensive tool to construct diversified portfolios that align with clients' investment goals. Its inclusion of companies from all sectors and market capitalizations allows advisors to provide exposure to a broad cross-section of the market, mitigating sector-specific risks and capitalizing on growth opportunities. The index's emphasis on innovation and technology enables advisors to offer clients access to industries driving future economic growth, while its inclusion of financials and other sectors ensures balanced portfolio diversification.
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For financial advisors, the Nasdaq Composite® offers a comprehensive tool to construct diversified portfolios that align with clients' investment goals. Its inclusion of companies from all sectors and market capitalizations allows advisors to provide exposure to a broad cross-section of the market, mitigating sector-specific risks and capitalizing on growth opportunities. The index's emphasis on innovation and technology enables advisors to offer clients access to industries driving future economic growth, while its inclusion of financials and other sectors ensures balanced portfolio diversification.
ETF Issuers
ETF issuers seeking to create broad-market products can leverage the Nasdaq Composite® as a foundation for their offerings. The index's extensive coverage of over 3,500 companies across all sectors and sizes ensures that ETFs based on the Nasdaq Composite® are well-diversified and appeal to a wide range of investors. By tracking this index, ETF issuers can offer products that capture the performance of the entire Nasdaq market, providing investors with comprehensive market exposure and the potential for growth driven by innovation and technology.
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ETF issuers seeking to create broad-market products can leverage the Nasdaq Composite® as a foundation for their offerings. The index's extensive coverage of over 3,500 companies across all sectors and sizes ensures that ETFs based on the Nasdaq Composite® are well-diversified and appeal to a wide range of investors. By tracking this index, ETF issuers can offer products that capture the performance of the entire Nasdaq market, providing investors with comprehensive market exposure and the potential for growth driven by innovation and technology.
Asset Managers
For asset managers, the Nasdaq Composite® serves as a key benchmark and a versatile tool for creating balanced investment products. Its inclusion of companies from various sectors, countries, and market capitalizations provides a robust framework for constructing portfolios that can attract a diverse clientele. The index's focus on innovation and growth allows asset managers to align their strategies with market trends, while its breadth ensures that portfolios are well-diversified to manage risk effectively.
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For asset managers, the Nasdaq Composite® serves as a key benchmark and a versatile tool for creating balanced investment products. Its inclusion of companies from various sectors, countries, and market capitalizations provides a robust framework for constructing portfolios that can attract a diverse clientele. The index's focus on innovation and growth allows asset managers to align their strategies with market trends, while its breadth ensures that portfolios are well-diversified to manage risk effectively.
Nasdaq Composite® Index Benefits
Broad Market Exposure
Access to a comprehensive range of companies across all sectors and market capitalizations.
Technology and Innovation Focus
Significant weighting in technology and innovative companies driving future growth.
Diversification
Inclusion of financials, real estate, and other sectors not covered in the Nasdaq-100®, offering broader diversification.
Dynamic Composition
The index is refreshed daily, incorporating new listings promptly, ensuring up-to-date market representation.
Global Reach
Includes international companies, providing exposure to global economic developments.
Challenges the Nasdaq Composite® Addresses
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Navigating Market Complexity
Provides a simple yet comprehensive way to track the performance of a diverse range of companies across multiple sectors and sizes.
Achieving Diversification
Offers exposure to over 3,500 companies, helping investors diversify their portfolios across industries, market caps, and geographies.
Capturing Technology and Innovation Growth
Includes many of the world's leading technology and innovative companies, allowing investors to capitalize on sectors driving economic growth.
Managing Volatility
The mix of large-cap and smaller companies helps smooth out volatility, providing a balance between stability and growth potential.
Providing Global Insights
Incorporates international companies, giving investors exposure to global market trends and opportunities beyond the U.S.
Navigating Market Complexity
Provides a simple yet comprehensive way to track the performance of a diverse range of companies across multiple sectors and sizes.
Achieving Diversification
Offers exposure to over 3,500 companies, helping investors diversify their portfolios across industries, market caps, and geographies.
Capturing Technology and Innovation Growth
Includes many of the world's leading technology and innovative companies, allowing investors to capitalize on sectors driving economic growth.
Managing Volatility
The mix of large-cap and smaller companies helps smooth out volatility, providing a balance between stability and growth potential.
Providing Global Insights
Incorporates international companies, giving investors exposure to global market trends and opportunities beyond the U.S.
Key Characteristics of the Nasdaq Composite® Index
Inclusion of All Sectors
The Nasdaq Composite® includes companies from all 11 ICB Industry groups, such as Technology, Consumer Discretionary, Health Care, Financials, and Industrials. This broad representation allows investors to gain exposure to the full spectrum of industries, providing a holistic view of the stock market's performance.
Global Representation
While predominantly U.S.-based, the index includes international companies, with approximately 5% of its weight representing non-U.S. exposure. Countries like the United Kingdom, the Netherlands, and Ireland are among the top contributors. This inclusion reflects the global nature of modern markets and allows investors to benefit from international growth opportunities.
Technology-Driven but Diverse
With over 56% of the index's weight dedicated to technology companies, the Nasdaq Composite® highlights the critical role that tech plays in driving market growth and innovation. However, it also extends far beyond major tech companies, including innovative firms in sectors like Health Care, Financials, Consumer Goods, and Industrials.
Market Capitalization-Based Weighting
The Nasdaq Composite® is weighted by market capitalization, meaning larger companies have a greater impact on the index's performance. This method ensures that the index reflects the economic significance of its constituents and highlights the key drivers of market growth.
Dynamic and Adaptive Composition
The index is refreshed daily, adding new listings the day after they appear on the Nasdaq exchange. This dynamic nature ensures that the index remains current and continues to provide a reliable snapshot of market performance, capturing the latest entrants.
Broad Company Sizes
The Nasdaq Composite® includes both large-cap industry giants and thousands of smaller firms. This diversity provides exposure to established companies and emerging innovators, offering a comprehensive view of the market.
Features of the Nasdaq Composite®
Market Capitalization-Based
Larger companies have more influence on index performance, aligning with their market impact.
Sector-Wide Representation
Covers all sectors, including those excluded from other Nasdaq indexes, such as Financials and Real Estate.
Technology and Innovation Focused
Significant weighting in technology and innovative companies driving the modern economy.
Daily Updates
Refreshed daily to include new listings promptly, ensuring up-to-date market representation.
Global Exposure
Includes international companies, offering investors access to global market trends.
Diverse Company Sizes
Exposure to companies of all market capitalizations, from large-cap to small-cap, enhancing diversification.
Investable Products
Tracked by investment products like the Fidelity Nasdaq Composite ETF, allowing investors to easily invest in the index.
Whether you're a financial advisor constructing diversified portfolios, an ETF issuer seeking a comprehensive market foundation, or an asset manager aligning strategies with innovation and growth, the Nasdaq Composite Index provides a dynamic and robust investment tool. Its broad market exposure, technology emphasis, and global reach make it an essential component for those looking to capture the full spectrum of market performance.
Discover how the Nasdaq Composite® can help you navigate market complexity, achieve diversification, and capitalize on growth opportunities.