The Nasdaq-100® (NDX®) originated in 1985 and recently celebrated being 40 years young!
Over that time, it has become a leading U.S. large-cap equity index, known for being a benchmark for many of the world’s most innovative companies.
Part of its success as an investment and trading product is the ecosystem of investments and derivatives that have evolved around it.
Four decades of ecosystem milestones
Building on the success of NDX over the past four decades, the ecosystem has progressed from predominantly supporting short-term trading instruments to supporting a diverse range of investment applications.
This development reflects the transformation of the index from its initial support of emerging technology companies into a diversified benchmark representative of the 21st century global economy. The following timeline shows the progression of this evolution.
Chart 1:Timeline of key Nasdaq-100 product launches and exchange-traded product AUM growth
Source: Nasdaq. Milestones listed for currently utilized products linked or benchmarked to NDX. Global NDX ETP AUM data between 4/1/1999 and 12/31/2025.
An index that started before indexing took off
Back in the 1980s and 1990s, index-based investing was still in its infancy. Consequently, the Nasdaq-100 began its life to showcase the companies listed on the Nasdaq Stock Market.
The first trading and hedging products were introduced in 1994: listed options and a passively managed Rydex Mutual Fund. These sparked liquidity within the Nasdaq-100 Ecosystem.
More sophisticated derivatives entered the ecosystem in the late 1990s as the technology sector expanded. In 1999, e-mini futures were added.
ETFs are introduced
One of the most important years for the ecosystem was 1999, when the “Nasdaq-100 Index Tracking Stock” (QQQ®) launched, providing the first exchange-traded fund (ETF) to track NDX. Nasdaq initially served as the sponsor of QQQ. Then in 2007 the sponsorship transferred to Invesco, initially under their “PowerShares” brand.
The Nasdaq-100 expands as an investment product
As we entered the current millennium, the ecosystem for investors continued to expand.
The index saw investors seeking leveraged, inverse and options exposure. Initially, this was done through structured notes and insurance products, but over time many ETFs offered similar exposures, making these investment choices much easier to access.
In more recent years, we have seen ETFs that are actively managed (like JEPQ), as well as ETFs tracking mega-cap portions of the index (like MAGS).
Furthermore, with significantly increased retail demand due to commission-free trading, smartphone-app based platforms and easier-to-access financial education, products requiring lower upfront capital, such as the Micro E-mini Futures, were created.
The Nasdaq-100 of today
The Nasdaq-100’s growth has been fueled not only by the performance and economic impact of the index constituents, but also by broader investment choices and easier market access.
Today, the ecosystem represents over $1.4 trillion of exposure to NDX through ETFs, mutual funds, insurance products, structured notes, and exchange-traded derivatives.
Click here to view the full white paper on the Nasdaq-100 Ecosystem, which additionally examines the market sizing and liquidity profile of NDX products.
Pranay Dureja, Derivatives and QIS Strategist at Nasdaq Index Insights, contributed to this article.
