Nasdaq 100 Vs Nasdaq Composite Index: Performance and differences – Explained

By: |
Updated: January 29, 2021 2:03 PM

As an Indian investor, it’s better to diversify globally and add some of the best performing US stocks to your portfolio in 2021.

best performing US stocks, trading in Nasdaq stocks from India, buying, investing, Nasdaq 100, Nasdaq Composite Index, Performance, differences, Can I invest in Nasdaq stocks from India, opening foreign trading account, best performing US stocks, invest in Nasdaq stocks from India, international brokerage platforms in IndiaYou can open an international brokerage account in India after fulfilling the KYC formalities and start trading in Nasdaq stocks from India.

After the outbreak of Coronavirus pandemic last year, the stock market across the world crashed. Equally fast was the rebound and global markets not only regained the lost ground but the leading US indices ended at near all-time high levels by the time 2020 ended. The global stock rally was led by US Stocks with the technology stocks at the forefront. And, the US stock market indices that primarily represents the technology stocks are Nasdaq 100 and Nasdaq Composite index. The good news is Indian investor can invest in Nasdaq stocks from India. You can open an international brokerage account in India after fulfilling the KYC formalities and start trading in Nasdaq stocks from India.

Nasdaq Stock Market

The most popular and investor favourites Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOGL) collectively referred to as FAANG stocks are listed on the Nasdaq stock market. You may buy them on either Nasdaq 100 or Nasdaq Composite index.

The Nasdaq Composite Index comprises of all Nasdaq domestic and international stocks listed on the Nasdaq Stock Market while the Nasdaq 100 index is a large-cap growth index and includes 100 of the top domestic and international non-financial companies based on market capitalization. One big difference between Nasdaq 100 and Nasdaq Composite index is that in the former there is no exposure to financial stocks.

Nasdaq – Sector allocation

The Nasdaq 100 consists of companies across major industry groups, Industrials, Consumer Goods, Health Care, Consumer Services, Telecommunications, Utilities and Technology Noticeably, what it does not include are the stocks of banks and financial companies, including investment companies. The maximum allocation of nearly 55.22 per cent is in the Technology sector while Consumer Services has a weightage of nearly 24.34 per cent.

On the other hand, Nasdaq Composite Index comprises of stocks from major industries such as Oil & Gas, Basic Materials, Industrials, Consumer Goods, Health Care, Consumer Services, Telecommunications, Utilities, Financials and Technology. The maximum allocation of nearly 48.16 per cent is in the Technology sector while Consumer Services has a weightage of nearly 19.49 per cent.

Top stocks in indexes

The weightage of different tech stocks in Nasdaq 100 and Nasdaq Composite index varies and some of the top US stocks may not be even in the top ranking. The variation in the allocation is more relevant while investing in ETF’s or index funds tracking these two indices.

Some of the top US stock by weightage in the Nasdaq 100 are Microsoft, Apple, Amazon, Alphabet (Google), Facebook, Intel, Cisco Systems, Comcast and Pepsico. Some of the top US stock by weightage in the Nasdaq 100 are Microsoft, Apple, Amazon, Alphabet (Google), Facebook, Tesla, Nvidia, Adobe and Paypal.

Nasdaq – Performance

The stock market globally had been on a roller coaster ride in 2020 after the big crash of nearly 30 per cent in March last year and then the big rebound in stock prices.

The Nasdaq 100 index was ( as on January 24) at around 13,366.40 level and is up by nearly 3.71 per cent YTD and about 45.39 per cent over the last 12 months respectively.

As on January 24, the Nasdaq Composite index was trading at around 13,543.06 level and is up by nearly 5 per cent YTD and about 46.22 per cent over the last 12 months respectively.

Investing in Nasdaq Stocks

Owning Nasdaq stocks such as Facebook, Tesla or Apple or others is possible from India. If the price in dollars is holding you back from buying any of them Fractional Investing through international brokerage platforms based in India makes it simpler for you. Sample this, Amazon stock trades at around 3320 dollars which makes it more than Rs 2 lakh to own a single share of the company. But, by opening a foreign trading account, you can even own a pie by investing as low as Rs 1000 through fractional investing. As an Indian investor, it’s better to diversify globally and add some of the best performing US stocks to your portfolio in 2021.

(All figures mentioned as on December 31, 2020 unless specified)

Looking to invest in US Stocks? Open a free account with Stockal - India's first borderless investment platform.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1NYSE FANG+ Index: A unique offering for investors and how to invest in top 10 US stocks
2Facebook, Apple, others surge as tech stocks regain steam on Wall Street; now eyes on Fed meet
3IT sector valuations on Wall Street now reasonable; remain optimistic despite volatility