Nasdaq Rolls Out Optimized Nasdaq-100

By
Cinthia Murphy
May 05, 2011
Share:

The Nasdaq-100 gets optimized, and company plans sampling on other indexes as well.

Nasdaq OMX Group, the company behind the Nasdaq exchange, is launching a new “optimized” version of its popular Nasdaq 100 Index that should offer better liquidity than the original benchmark, all while preserving return and volatility characteristics.

The Nasdaq-100 Data Explorers Optimized Index will essentially be a subset of the securities included in the Nasdaq 100 Index—a basket of the largest nonfinancial companies globally—but the new benchmark screens out stocks with low liquidity or those that are relatively expensive to borrow in the share-lending market.

At launch, the new index, which relies on data provided by global stock loan data provider Data Explorers, excluded 18 securities from the original index, the company said in a press release.

“The launch of the NASDAQ-100 Data Explorers Optimized Index offers investors the liquidity of the NASDAQ-100 Index components but with extra measures of liquidity,” Nasdaq OMX Executive Vice President John Jacobs said in a release.

“We believe the application of our screening methodology to the NASDAQ-100 Data Explorers Optimized Index will help investors improve liquidity and manage risk,” Data Explorers CEO Donal Smith added in the release. “We are confident this new index will become a model for the construction of other new indexes and the basis of exchange-traded products.”

The index is the first in what the two companies say is a planned series of optimized indexes. The optimized Nasdaq-100 index will be rebalanced quarterly.

 

ETF DAILY DATA

WisdomTree's 'HEDJ' pulled in more assets on Friday, March 27, as total U.S.-listed ETF assets rose to $2.089 trillion.

A big 'SPY' redemption paced SSgA's issuer-leading outflows on Friday, March 27, as total U.S.-listed ETF assets rose to $2.089 trillion.

ETF.COM ANALYST BLOGS

By Dave Nadig

How Ric Edelman is reinventing the ‘new economy’ investing paradigm.

By Olivier Ludwig

What’s cooler than an ETF with a ticker like ‘HACK’? The way investors are using it.

By Olivier Ludwig

Yes, 2015 is shaping up to be the ‘year of currency hedging,’ but that’s not necessarily a good thing.

By Elisabeth Kashner

ETF.com steps in to referee a catfight that has erupted in the world of robo advisors.