What is Nasdaq?

Low-threshold access to the securities markets is spurring interest in investing and stocks among new investors. As the second largest stock exchange in the world, the Nasdaq plays an important role in several ways - find out more in this article.

More and more people are discovering investing and the stock markets for themselves. In Germany alone, around 2.7 million more investors were investing in stocks, mutual funds or stocks-based ETFs at the beginning of 2021 than compared to 2019. Low-threshold access through smartphone apps that simplify investing, as well as the range of easy-to-understand articles on financial issues and investing for beginners, are contributing to this development significantly.

This means that about 1/6 or around 17.5% of the population in Germany aged 14 or older are investing in stocks, with new investors under the age of 30 even representing the strongest contributors with an increase of almost 70% compared to the previous year. On average over many years, stocks yield between 6-9%, far superior to the returns generated by savings accounts and passbooks. Respectively, an investment in a DAX ETF, for example, would have generated an average return of almost 8% per year over the last 15 years. Newcomers to the market have a particular interest in important stock exchanges and their range of indices.

Nasdaq – Home of large caps

The Nasdaq is the largest electronic stock exchange in the USA and celebrated the 50th anniversary of its launch in February 2021. It is the second-largest stock exchange in the world after the New York Stock Exchange. Originally, the Nasdaq was created as a marketplace to provide investors with the fast, transparent and computer-supported trading of securities. However, the term "Nasdaq" is also more often used to refer to the various indices of the stock exchange.

Originally designed as an alternative to the far less efficient management of buy and sell orders by specialists, which was the prevailing model in the past, the Nasdaq's computerised trading system quickly became the standard for markets worldwide after its inception in 1971. As the leading technology exchange featuring all the major players in growth areas such as digitalisation, high technology, the internet and biotechnology, the Nasdaq represents a wide range of companies and stands for innovation and growth.

What does the Nasdaq 100 include?

The Nasdaq 100 Index is a price index of 100 of the largest and most important technology companies in the USA, specifically the 100 companies included in the Nasdaq Composite with the highest market cap after their respective weighting. Sectors such as technology, retail, industry, telecommunications, health care, transport and media are included, but financial companies are not. 

The Nasdaq 100 features all the big names: from Apple, Alphabet Inc. (Google), Netflix and Baidu to Facebook, Intel, Microsoft, Nvidia, PayPal and many more. By comparing current and past price levels, it is possible to calculate the overall market performance. The broad diversification of sectors helps to reduce the risks in investing.

Investing in an index directly is not possible, because it is a measure of a change in value that replicates data such as prices. For this reason, investors simply choose to invest in a securities-based investment product such as an ETF (exchange-traded fund) instead.

How can I invest in the Nasdaq 100?

The Top 100 US Tech Stocks is an exchange-traded fund (ETF) that replicates the performance of the Nasdaq 100 index as closely as possible. Bitpanda Stocks* allows you to invest in ETFs, such as the Top 100 US Tech Stocks, fractionally and from as little as €1, commission-free and with tight spreads. This is made possible by derivative contracts covered by the underlying stocks and ETFs.

*Bitpanda Stocks enables investing in fractional stocks. Fractional stocks in Europe are always enabled via a contract which replicates the underlying stock or ETF (financial instruments pursuant to section 1 item 7 lit. d WAG 2018). Investing in stocks and ETFs carries risks. For more details see the prospectus at bitpanda.com.