Concentration in the Nasdaq 100 reaches a level with no modern precedent
The top five names are now 42 percent of the index. That changes what owning the index actually means.
The five largest constituents of the Nasdaq 100 account for 42 percent of its weight, the highest concentration in the index history and well above the peak reached during the dot-com period.
An investor who buys the index believing they are buying a hundred companies is, in weighted terms, buying five companies and a long tail. That is not necessarily wrong, but it is worth knowing.
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