We are excited to share that Fubon has announced its first ETF tracking of the renowned Nasdaq-100 index on the Taiwan Stock Exchange (Ticker: 00662). The Nasdaq-100 tracks 100 of some of the world’s best brands: Apple, Tesla, Starbucks, Microsoft, Alphabet and Facebook to name a few. Based on the growth of the companies included in the index the Nasdaq-100 is up over 73 percent from year-end 2012 through market close June 22, 2016. To help celebrate the launch of the Fubon Nasdaq-100 ETF, here are 10 fun facts you may not know about one of the world’s most popular indexes:
- The Nasdaq-100 Celebrated its 31st Birthday. The Nasdaq-100 Index officially launched January 31, 1985. But it was only made available to investors in the Asia-Pacific region seven years ago when the first ETF tied to the Nasdaq-100 cross listed in Singapore in 2009. Since the launch of that fund, the Nasdaq-100 Total Return Index has experienced a return north of 240%.
- At the Forefront of Innovation. The Nasdaq-100 is home to many category-defining companies that are on the forefront of innovation in their respective industries. The sales growth of the index components are among the highest in the industry- eight components have averaged more than 50 percent sales growth over the last three years.
- The Index Contains 100+ Stocks. Traditionally, the index has been limited to 100 common-stock issues, with only one issue allowed per user. Now, the index is limited to 100 issuers, some of which may have multiple issues as index components. Today, the index has 105 components, representing 100 issuers, four of which are from China: Baidu, JD.com, Ctrip and NetEase.
- An American Index and Global Disruptor. Products tied to the Nasdaq-100 are available in 27 countries. More than $45 billion of investments in ETFs are tied to the index and derivatives tied to the index have a notional value of over $1 trillion. Several ETFs are tied to the Nasdaq-100 in the Asia-Pacific and the Fubon Nasdaq-100 ETF is the newest member of the family of products.
- It‘s THE Large-cap Growth Index. The smallest companies in the Nasdaq-100 have historically been larger than the smallest of large cap benchmarks, including the S&P 500. The members of the index have historically been growth-oriented and disruptors in each of their respective industries. Investors determine membership of the Nasdaq-100 as inclusion is based on rankings tied to market cap. There is no committee making membership determinations, as is the case with other well-known indexes.
- Cross Border Opportunity. Expansion of the Nasdaq-100 into new markets provides new exposures for local investors. Investors around the world can now invest in the brands they trust, regardless of where they live. The Nasdaq-100 represents the world’s leading innovative companies that are driving the global economy forward.
- Rebalancing Act. Since inception, the Nasdaq-100 has had 455 members. Of the original members at launch, six are in the current index: Apple, Costco, Intel, Micron Technology, PACCAR and Seagate Technology. Each year, the index is rebalanced and between seven and 15 stocks are added or removed from the index. Rebalancing is important to investors because it insures the index is accurately performing based on its underlying methodology, which in turn will help generate desired performance.
- Non-Financial Companies Only. Commonly viewed as the “Technology” index, the Nasdaq-100 is home to some of the most well-known names in Technology. It is also heavily weighted in Consumer Services and Health Care. However, the Nasdaq-100 purposefully omits the Financials Industry. Currently, there are no Utilities, Oil & Gas and Basic Materials stocks in the index though these industries have been present in the index historically.
- How to Get in the Index. Outside of being one of the largest 100 non-financial companies listed on the Nasdaq Stock Market® there are a number of other rules that must be met. For example, to be eligible, each issue must have an average daily volume of 200,000 shares per day or more. In addition, its index weight must be greater than 0.1 percent. Among other requirements, the security must also be “seasoned,” or have listed on a market for at least three full months.
- A Sister Index? The Nasdaq-100 was one of two indexes that launched in 1985. Its sister index, the Nasdaq Financial-100 focuses on the financial companies listed on Nasdaq. At the time, interest was more centered on financial companies listed on Nasdaq, so the initial focus was on the Nasdaq Financial-100. The index still exists, but the non-financial Nasdaq-100 has been the index that has risen the most in popularity over the years.
The Nasdaq-100 has become one of the world’s preeminent large cap growth indexes. In addition to serving as an indicator of the value of its components, the index has been highly successful as the basis for tradable products. A wide assortment of financial products track the Nasdaq-100 and we congratulate Fubon in helping to provide new exposures to Taiwanese investors via the 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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