Nasdaq Global Select Market Composite

Definition of Nasdaq Global Select Market Composite

The Nasdaq Global Select Market Composite, also known as the Nasdaq Global Select Market Index, is a Stock market index that tracks the performance of approximately 1,200 of the largest and most actively traded non-financial companies listed on the Nasdaq Stock Market. It represents the international component of the Nasdaq Composite Index and includes companies from various sectors, including technology, healthcare, retail, and industrial. The index is designed to provide a Benchmark for global investors seeking to track the performance of leading non-U.S. companies.

Role in Financial Markets

The Nasdaq Global Select Market Composite serves as a key indicator of the performance of the international technology sector. It is widely used by investors, analysts, and portfolio managers to assess the health of the global economy and make investment decisions. The index is also used as the underlying reference for a variety of financial instruments, such as exchange-traded funds (ETFs), mutual funds, and derivatives. These instruments allow investors to gain exposure to the international technology sector in a diversified and cost-effective manner.

Economic Impact

The Nasdaq Global Select Market Composite reflects the growth and innovation of the international technology sector. Its performance can impact economic policies, as governments may consider the index’s trajectory when formulating regulations and incentives for the technology industry. Financial stability can also be influenced by the index, as fluctuations in the index’s value can affect the confidence of investors and market participants. Moreover, the index can influence market behavior, as investors may adjust their portfolios in response to its performance.

Regulatory Aspects

The Nasdaq Global Select Market Composite is regulated by the U.S. Securities and Exchange Commission (SEC) under the Investment Company Act of 1940. The index is reviewed and maintained by Nasdaq, which ensures that the companies included in the index meet certain eligibility criteria and that the index’s methodology is transparent and consistent. Recent regulatory changes, such as the Markets in Financial Instruments Directive II (MiFID II), have had minimal impact on the index’s regulation.

Historical Development

The Nasdaq Global Select Market Composite was launched in 1995 as the Nasdaq International Index. It initially included 500 non-U.S. companies listed on the Nasdaq Stock Market. Over the years, the index has undergone several changes to its methodology and constituent companies. In 2002, it was renamed to the Nasdaq Global Select Market Index. Key milestones in the index’s history include the addition of companies from emerging markets and the expansion of its coverage to include companies from all major regions of the world.