The Nasdaq-100 Index (NDX), since its inception in 1985, has been a barometer for premier non-financial companies recognized for their innovative contributions in fields like technology and healthcare. These firms, which include household names such as Starbucks (NASDAQ: NASDAQ:SBUX) and Apple (NASDAQ: NASDAQ:AAPL), have become integral to daily life with significant global reach and liquidity.
Over the years, the NDX has demonstrated remarkable performance compared to its peers. From December 2007 to September 2023, the Nasdaq-100 has delivered a striking cumulative return of 726%, significantly outpacing the S&P 500's 301% during the same period. This impressive growth is reflected in its annualized returns, which have consistently been in the double digits, showcasing the index's robust investment potential.
In addition to capital gains, the NDX has seen its dividend yield grow substantially over the past two decades. It started from minimal figures and has now nearly reached parity with more traditional indexes as of June 2023. This increase indicates a maturing market presence and a more attractive proposition for income-seeking investors.
The companies within the NDX are also leading the way in environmental, social, and governance (ESG) initiatives, setting ambitious goals to combat climate change. Their proactive stance on ESG matters is highlighted by their significant representation within the Nasdaq-100 ESG Index. This is noteworthy when compared to the inclusion rates of S&P companies within their respective ESG indexes.
For investors looking to tap into the high-performing, ESG-conscious firms of the NDX, products like the QQQ and QQQM ETFs offer a convenient gateway. These ETFs provide exposure to the innovative and financially sound companies that have helped the Nasdaq-100 achieve its superior market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.