Nasdaq To Launch Risk-Weighted Nasdaq 100


Shutterstock photo

Nasdaq OMX, the company behind the No. 2 U.S. stock exchange and a big and growing indexing business, plans later this month to launch a risk-weighted version of its popular Nasdaq-100 Index, which is the basis for the nearly-$35 billion PowerShares QQQ Trust (NasdaqGM:QQQ).

The company's email communique about the May 23 launch was light on details, but did say that the Nasdaq-100 Indexcellent 80 Index will hedge risk by reducing participation in the Nasdaq-100 when the index loses value. It noted that it will make use of the patent-pending methodology of Indexcellent, LLC to "apply protection for 80 percent of the high water index level."

This launch comes less than a month after S&P Dow Jones Indices announced the S&P GSCI Risk Weight Index. The launches speak to a broader focus in the world of indexes and ETFs on enhanced beta-type screens that attempt to protect returns or deliver better returns than first-generation capitalization-weighted indexes.

The Nasdaq-100 comprises the 100 largest (by market-cap), nonfinancial securities from the Nasdaq exchange, and the Nasdaq-100 Indexcellent 80 Index will invoke the index provider's patent-pending "Indexcellent" methodology to create exposure to the Nasdaq-100 stocks while hedging against volatility.

Permalink | 'copy; Copyright 2009 IndexUniverse LLC. All rights reserved

Don't forget to check's ETF Data section.

Copyright ® 2013 IndexUniverse LLC . All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , ETFs

More from IndexUniverse




Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by