Some investors believe that the NASDAQ composite index is the same as the NASDAQ 100 index. So are these investors right, and if there is a difference, what is it?

To answer the first question, these investors are wrong, the NASDAQ composite is different the NASDAQ 100, but what is the difference?

Well the difference is that while the NASDAQ composite index tracks all the companies listed on the NASDAQ, the NASDAQ 100 follows only the top 100 companies with the largest market cap that are listed on the NASDAQ. Additionally, the NASDAQ 100 index excludes international financial companies.

So, you can say that the NASDAQ 100 index is a sub-index of the NASDAQ composite index, because all the companies tracked by the NASDAQ 100 index are already tracked by the NASDAQ composite index, but not the other away around.

Some of the most important companies followed by the NASDAQ 100 index are Apple, Adobe, Baidu, Cisco, Dell, Mattel, Netflix, Oracle, Sirius, and Yahoo.

Note that the stock QQQ (NASDAQ:QQQ) is tied to the performance of the NASDAQ 100 index.