More than a quarter of Nasdaq-100 stocks are in bear markets — Wall

On Oct 3, 2021

The Nasdaq-100 Index has performed very well against the broader S&P 500 index in recent years and it is down only 6% from its record intraday high set on Sept. 7. Even so, more than a quarter of stocks in the Nasdaq-100 are in bear markets — down at least 20% from their 52-week highs.

Before looking at those stocks, let’s take a quick look at the Nasdaq-100 Index
NDX,
+0.70%.
It is made up of the largest 100 non-financial stocks in the full Nasdaq Composite Index
COMP,
+0.82%
and is weighted by market capitalization. The Nasdaq-100 has greatly outperformed the S&P 500 index
SPX,
+1.15%
(which is also weighted by market cap) in recent years.

Using exchange-traded funds that track both — the Invesco QQQ Trust
QQQ,
+0.62%
for the Nasdaq-100 and the SPDR S&P 500 ETF Trust
SPY,
+1.19%,
here is a 10-year chart showing total returns, with dividends reinvested:

One reason for QQQ’s outperformance over the past 10 years has been its heavy concentration in giant tech companies. As of the close on Sept. 27, the top five companies held by QQQ (Apple Inc.
AAPL,
+0.81%,
Microsoft Corp.
MSFT,
+2.55%,
Amazon.com Inc.
AMZN,
-0.05%,
Tesla Inc.
TSLA,
-0.03%
and two common-share classes of Alphabet Inc.
GOOG,
+2.40%

GOOGL,
+2.14%
) made up 41.3% of the portfolio. Meanwhile the top five positions of SPY (the same, except replace Tesla with Facebook Inc.
FB,
+1.07%
) made up 22.6% of its portfolio.

Another important difference between the indexes is the Nasdaq-100 includes American depositary receipts of some non-U.S. companies, while the S&P 500 excludes ADRs. Some of the ADRs held by QQQ are included in the list below.

Here’s a comparison of average annual returns for the two ETFs over many periods:

ETF	3 Years	5 Years	10 years	15 Years	20 Years
Invesco QQQ Trust QQQ, +0.62%	25.6%	25.8%	22.0%	16.6%	14.2%
SPDR S&P 500 ETF Trust SPY, +1.19%	16.3%	17.0%	16.4%	10.3%	9.5%
Source: FactSet

One thing to keep an eye on…