NASDAQ-100 Equal Weighted Index

Market capitalization. We know it, we love it, and we understand that when it comes to stock indexes, most of them are market-capitalization weighted.

And that’s all fine and dandy, but sometimes we’re in the mood for something different. When that happens, we turn our attention to the NASDAQ-100 Equal Weighted Index, which is like the NASDAQ-100 Index, but with a twist: it’s not market-capitalization weighted. “Gasp!” one might say, and to that, we say, “No, it’s cool, check this out.”

See, the index is made up of the top 100 non-financial companies (based on their market cap) listed on NASDAQ. We’re talking tech companies, restaurant chains, communications companies—all of ‘em. And each stock on there starts out life with a weight of 1%. (‘Cuz it’s an equally weighted index.) They perform how they’re going to perform, with each stock having an equal affect on the performance of the index as a whole, and then once a quarter the whole thing is rebalanced and we start again.

It’s pretty cool, and it gives us a different way to look at our favorite index: the NASDAQ-100. And different (if Arby's commercials are to be believed) is good.