A Peloton stationary bike.
Scott Heins/Getty ImagesWhile many investors were closely watching Tesla’s first days in the S&P 500 —the stock is down 7% so far this week—the changes in another pre-eminent stock index went largely under the radar.
Last Friday, six new members joined the Nasdaq 100 index, which tracks the 100 largest nonfinancial companies listed on the Nasdaq Exchange, including some of the world’s most innovative and fastest-growing companies such as Amazon.com (ticker: AMZN), Apple (AAPL), and Microsoft (MSFT).
The index has soared 45% year to date, more than triple the S&P 500’s 14% gains.
Utility giant American Electric Power (AEP) is now part of the Nasdaq 100 after changing its listing exchange from the New York Stock Exchange to Nasdaq. Another new member is Match Group (MTCH), which owns some of the most popular online-dating applications like Match, Tinder, and Hinge. The company went public in July as a spinoff of its holding company Interactive Group, and the stock has already surged 47% as of last Friday.
Home fitness firm Peloton Interactive (PTON) has also joined the Nasdaq 100. The stock took a wild ride in 2020, rising 392% as of last Friday as the Covid-19 pandemic changed the way people worked out and significantly drove up the demand for in-home fitness solutions. The stock jumped another 16% this week after joining the Nasdaq 100.
The other three newcomers to the Nasdaq 100 are chip manufacturer Marvell Technologies (MRVL), cloud cybersecurity firm Okta (OKTA), and software company Atlassian (TEAM). As of last Friday, the three stocks have gained 79%, 136%, and 106%, respectively, year to date. Their growing size has lifted them to the rank of the largest 100 nonfinancial stocks on the Nasdaq Exchange.
While those companies joined the Nasdaq 100, six have been pushed out of the index. They are BioMarin Pharmaceutical (BMRN), Citrix Systems (CTXS), Expedia (EXPE), Liberty Global (LBTYA and LBTYK), Take Two Interactive (TTWO), and Ulta Beauty (ULTA).
Those changes have been reflected in the $149 billion Invesco QQQ Trust (QQQ) that tracks the Nasdaq 100 index. The exchange-traded fund has been a popular choice for many investors and traders alike. As the fifth largest ETF in the U.S., its assets have grown sixfold over the past decade due to strong investor interest and rapid appreciation of its holdings. In 2020 alone, the fund received more than $19 billion of net inflows.
In October, Invesco launched a cheaper version of QQQ with the exact same stock exposure: the Invesco Nasdaq 100 ETF (QQQM), where M represents mini. While the original QQQ Trust currently trades around $310 per share and charges an expense ratio of 0.20%, the new Invesco Nasdaq 100 is priced at just $127 per share and costs 0.05 percentage point less.
Since QQQ is one of the most liquid ETFs in the U.S. with a spread of just a penny between bids and offers, many short-term traders might continue to use it to harvest gains with low trading costs. The newly launched QQQM, with lower share prices and fees, would be a better choice for the long-term buy-and-hold investors that care less about liquidity and trading spread. The fund has already gathered $344 million assets just two months after its October launch.
Write to Evie Liu at evie.liu@barrons.com
December 24, 2020 at 06:15AM
https://www.barrons.com/articles/forget-about-tesla-and-the-s-p-500-peloton-is-now-in-the-nasdaq-100-51608765322
Forget About Tesla and the S&P 500. Peloton Is Now In the Nasdaq 100. - Barron's
https://news.google.com/search?q=forget&hl=en-US&gl=US&ceid=US:en
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