Sunday, August 31, 2014

Historical Returns for the Nasdaq-100 (1986-2013)

The Nasdaq-100 Index includes 100 of the largest domestic and international non-financial securities listed on the Nasdaq Stock Market based on market capitalization. It is a modified capitalization-weighted index. The weightings of companies in the index are based on their market capitalizations, with rules capping the influence of the largest components. As of August 29, 2014, the three largest components of the index are Apple (comprising about 13.55% of the index), Microsoft (comprises about 8.23% of the index), and Google (comprises about 4.23% of the index).

The Nasdaq-100 was initiated on January 31, 1985 and has since become one of the most widely-followed technology indexes during the bubble. The chart below (click on the chart for a larger view) illustrates historical annual returns for the Nasdaq-100 index between the calendar years 1986 and 2013.  The Nasdaq-100 Index does not account for dividend payouts, but the Nasdaq 100 Total Return Index, which was initiated on March 4, 1999, does account for dividends.  The chart below calculated based on returns for (a) the Nasdaq-100 Index from January 1, 1986 - March 3, 1999; and (b) the Nasdaq-100 Total Return Index from March 4, 1999 - December 31, 2013.

As shown below, the Nasdaq-100 soared 36.92% during 2013, its second-highest return of the past 10 calendar years.  The Nasdaq-100 rose about 212% during the calendar years between 2009 and 2013, an annualized return of an impressive 25.55%.  

I have previously stated that I believe that the Nasdaq-100 is in the beginning stages of a multi-year bull market run as investors reconsider the potential of high tech companies.  The Nasdaq-100 returned a total of about 2834.56% between 1986 and 2013, an annualized return of about 12.83%.  This greatly outperforms the total return of  about 1575.41%, or about 10.59% of the the S&P 500 Index during the same period of time. 

* I have posted updated returns for the Nasdaq-100 through 2016 in another post.

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