Nasdaq 100 index to undergo special rejiggering because a few tech stocks have gotten too big

The accelerated emergence of a fewer already monolithic tech stocks this twelvemonth is causing Nasdaq to marque antithetic adjustments to its fashionable maturation index.

The institution announced connected July 7 that it volition bash a special rebalance of the Nasdaq 100 Index, which volition instrumentality effect earlier the marketplace opens connected July 24.

The institution said a peculiar rebalance tin beryllium utilized to "address overconcentration successful the scale by redistributing the weights."

While the scale is already rebalanced connected quarterly basis, Nasdaq tries to support the 5 biggest stocks beneath a 40% combined weighting successful 1 rebalance per twelvemonth designated arsenic the yearly adjustment, according to the firm's methodology. The 5 biggest stocks look to beryllium implicit that threshold currently, according to the holdings of the Invesco QQQ ETF, which tracks the index.

Invesco QQQ Top Holdings

The QQQ's holdings amusement however concentrated the scale has become. The 3 largest positions — Microsoft, Apple and Nvidia — relationship for much than 30% of the money combined, arsenic Nvidia's banal terms has astir tripled this year. The apical 10 holdings relationship for a combined weighting of astir 59%.

Nasdaq said it volition denote caller weightings connected Friday, July 14.

The Nasdaq 100 scale consists of 100 of the largest non-financial companies that commercialized connected the exchange, and is often seen arsenic a proxy for maturation stocks. The scale has surged astir 37% twelvemonth to date, good supra the S&P 500 and the Dow Jones Industrial Average.

The Nasdaq 100 has risen sharply this year.