ETF Trends
ETF Trends

Note: This article is courtesy of

By: Rob Hughes, Head of Index & Advisor Solutions, Nasdaq Global Information Services

Perceptions can be hard to change. Sometimes we think we know something based on the way it used to be, but in reality, our perceptions might be rooted in outdated facts and information.

Whether you’re talking about someone you knew 30 years ago (who wants to be judged for what they did in high school?) or something that seems much less subjective like a famous index  — when you’re known for being a certain way, it can be hard to make a new impression.

In much the same way, the Nasdaq-100 — today’s leading global large-cap growth index1 — can be stuck in outdated perceptions. The Nasdaq-100 provides exposure to the 100 largest non-financial companies listed on Nasdaq , and while many still think of it as a tech-focused or even tech-exclusive index, that’s far from today’s reality.


A history rooted in tech

While the index has never been limited to tech stocks, at its inception just over three decades ago, Nasdaq’s highest growth performers were many of the tech heavyweights of the day. In 1985, Technology, as defined by the Industry Classification Benchmark (ICB), was the largest industry in the Nasdaq-100. However, the 23 technology companies only made up 23% of the market cap weight within the index. The largest stock was Wall Street’s tech darling, Intel; Apple was high on the list, although it did not yet hold the leadership position it occupies today.

The tech boom of the mid-1990s helped perpetuate the idea that the Nasdaq-100 was a “tech index.” By November 1998, with the tech-driven bull market in full force, technology stocks accounted for an unprecedented 70% of the market cap of the index. By the early 2000s, tech stocks continued to dominate the index. Tech continued its prominence into the next decade. Even as recent as 2011, when tech companies were the driving force in the recovery of the financial crisis, technology represented 61.6% of the index market cap.

What is not widely known, however, is that Consumer Services and Industrials have played a close second and third place at 21% and 15% respectively at time of inception. Some notable non-tech firms that were included at the launch were HBO, Liz Claiborne, Mack Trucks, and McCormick Spices.