The Evolution to Power Investor Choice Worldwide

The Nasdaq-100® (NDX®) is a globally recognized index of 100 of the most innovative large cap companies listed on the Nasdaq Stock Market®. Originating in 1985 and recently celebrating 40 years as a leading US large cap equity index, NDX has evolved beyond its core identity as a benchmark for many of the world’s most innovative companies; it has become the foundation for a complex and robust ecosystem of investment vehicles and instruments. This development reflects the transformation of the index from its initial support of emerging technology companies into a diversified benchmark representative of the 21st century global economy.

Today – after several decades of product innovation and index constituent growth to support AUM – the Ecosystem is primarily driven by the following six product types:

• Index-Based Benchmarking

• Exchange Traded Products

• Mutual Funds

• Derivatives

• Insurance

• Structured Notes

Using the 6 key financial products through which the markets interact with the Nasdaq-100, we examine the relative sizes of each of the products. Although size is expressed through different nomenclatures across each product (example: Contract Open Interest for Derivatives, Assets Under Management for ETFs, etc.), these metrics were normalized by examining notional value of each product throughout 2025. Notional value reflects the leverage of derivatives by considering the underlying assets that determine their payments. For the cash-secured products, AUM was determined to be an accurate measure of notional value.

Figure 1: Average 2025 Market Size (Notional Value) Across Global NDX Products ($s)

^{Source: Nasdaq, CME, OCC, Factset, Bloomberg, Morningstar. ETF and Mutual Fund sizes are reflective of the Assets Under Management linked or benchmarked to NDX. ETF and Mutual Fund sizes reflective of average AUM across 2025. Structured Note and Insurance sizes reflective of total capital invested in live transactions as of 12/31/2025. Derivatives sizes reflective of average total notional open interest across 2025. Total NDX size data stated in trillions rounded to one decimal point, XND Flex Option Size stated in billions rounded to two decimal points, XND Listed Option Size stated in billions rounded to one decimal point, and all others stated in billions rounded to the nearest whole number.}

At a high level, 46% of the $1.41 trillion in total Nasdaq-100 notional value identified in 2025 was held in derivatives, while 42% was in ETFs. Between 2024 and 2025, over $350 billion of Nasdaq-100 notional value was added across the measured ecosystem. Compared to the broader US markets, there are two forms of investor preference that continue to be expressed in the ecosystem:

1. Focus on passive long-only exposure tracking the performance of NDX.

With its above-average annualized returns and focus on Nasdaq-listed companies, market participants typically view NDX as a differentiator rather than as a barometer for the US Equity Markets (as the S&P 500 is more commonly viewed). As a result, fund managers have rarely (if ever) benchmarked themselves against NDX, and long-only investors have mainly chosen direct passive exposure to NDX. This is reflected through the prominence of QQQ and QQQM, which combined make up nearly 70% of total ETF market capitalization; only a small fraction can be considered actively-managed, in the case of certain NDX Options Overlay ETFs.

 2. Tailored exposure focused on beta over alpha.

Investors seeking tailored exposure to NDX due to its perception as a “differentiated” product typically focus on risk management and transformation according to specific portfolio goals, as opposed to alpha generation via active risk-taking vs. a benchmark. These needs are met across a wide range of products, from the ~$650bn listed and flex derivatives market, to the “secured” variety brought through the ~$200bn market for structured notes, insurance, and leveraged/inverse/options ETFs. Combined, these risk-oriented solutions make up approximately 59% of the assets tracking NDX.

Altogether, the combination of passive and active strategies has created a dynamic and resilient NDX investment landscape, enabling investors to pursue a broad range of investment objectives with flexibility.

Zooming in on the growth of NDX in the past 15 years, it is also important to understand how the US large cap equity markets have evolved during this period. The equities contributing most to market growth have mainly been NDX constituents; all seven of the “Magnificent 7” companiesi are Nasdaq-listed and included in NDX. Although large cap stocks are typically characterized as companies with a market capitalization greater than $10 billion as of 2025, this static metric does not take into account the growth the US equity markets have seen during this period.

A more dynamic method of defining large cap stocks is by measuring the average market cap of the bottom 5th percentile of stocks in the Nasdaq US Large Cap™ Index (NQUSL™) at the end of each year. NQUSL represents the large cap portion of the Nasdaq US Benchmark™ Index (NQUSB™) and includes equities ranked within the top 75% of market capitalization for that index. Using this method, the large cap threshold has grown from $4.2bn in 2011 to $22.9bn in 2025 — an increase of over five times. The chart below shows how the smallest companies present in NDX and the S&P 500 (SPX) measure up against a dynamic threshold for large cap:

Figure 2: NDX and SPX Minimum Market Cap against Dynamic Large Cap Threshold

^{Source: Nasdaq, Factset, Bloomberg. All data is as of the end of each year and between 12/31/2011 and 12/31/2025.}

While nearly all of NDX has kept up with this increase, SPX includes a significant number of constituents with market capitalizations below the threshold, resulting in notable mid cap exposure within the index. Given that NDX constituents have more consistently tracked the threshold for large cap inclusion, the 100-constituent makeup of the index across nearly all sectors serves as a balance between diversification and undiluted large cap exposure. This supports the emerging view of the Nasdaq-100 Index® as a truer large cap index and reinforces its status as the “Benchmark of the 21st Century”.

Click here to view the full white paper on the Nasdaq-100 ecosystem.

To learn more about NDX, check out the following resources:

Landing Page | One Pager | Product Guide | Benchmark of the 21st century |

For weekly research updates, sign up for the “Nasdaq-100 Weekly” email newsletter here.

^Footnote:

^{i Magnificent 7 stocks include Alphabet (parent of Google), Amazon, Apple, Meta Platforms (parent of Facebook), Microsoft, Nvidia, and Tesla. While not usually included in the Magnificent 7, Broadcom’s market cap has frequently been on par with (if not exceeding) Tesla’s in recent years.}

^Disclaimer:

^{Nasdaq®, Nasdaq-100 Index®, Nasdaq-100®, NDX®, and QQQ® are registered trademarks 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.}

^{Information set forth in this release contains forward-looking statements that involve a number of risks and uncertainties. Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Forward-looking statements can be identified by words such as “will”, “may”, and other words and terms of similar meaning. Such forward-looking statements include, but are not limited to, statements related to the future stated growth of the Nasdaq-100 ecosystem. Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaq’s control. These risks and uncertainties are detailed in Nasdaq’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are available on Nasdaq’s investor relations website at http://ir.nasdaq.com and the SEC’s website at www.sec.gov. Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.}

^{© 2026. Nasdaq, Inc. All Rights Reserved.}

^{Written by Pranay Dureja Derivatives and QIS Index Research, Nasdaq Global Indexes}

Permalink | © Copyright 2026 etf.com. All rights reserved