You can’t buy “the Nasdaq” directly: you choose a fund that tracks a specific Nasdaq index, or buy selected Nasdaq-listed stocks yourself. First decide whether you want exposure to the broad Nasdaq Composite or the narrower Nasdaq-100; then compare the fund’s structure, costs, holdings and risks. An ETF can itself be an index fund, so these are not three mutually exclusive categories.
What does “the Nasdaq” mean?
Nasdaq is an exchange, and the phrase “the Nasdaq” can also refer to different indexes. The two relevant benchmarks are not interchangeable:
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- Nasdaq Composite: a broad index of Nasdaq-listed securities. Nasdaq’s June 11, 2026 explainer describes it as including more than 3,000 companies across sectors and market capitalizations. Its methodology includes domestic and international common-type stocks listed on the Nasdaq Stock Market and excludes certain security types, including ETFs and preferred stocks. Nasdaq’s Composite overview and published methodology explain its scope.
- Nasdaq-100: 100 of the largest non-financial companies listed on Nasdaq. It uses modified market-cap weighting and has eligibility, concentration and reconstitution rules. See Nasdaq’s Nasdaq-100 methodology.
The indexes can move similarly at times, but their different constituents and weights can lead to different results. Many Nasdaq-branded products, including QQQ and QQQM, track the Nasdaq-100 rather than the Composite. Nasdaq reported in 2026 that more than 178 Nasdaq-100-linked products traded on 18 exchanges, with over $600 billion in tracking assets and more than $623 billion in average daily traded notional value. Those are Nasdaq-reported figures from that year, not live totals. Nasdaq’s explainer and product overview provides context.
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An index is a measurement, not an investment you can purchase directly. As the SEC puts it: “You cannot invest directly in a market index, but because index funds track a market index they provide an indirect investment option.” SEC Investor Bulletin: Index Funds.
“Index fund” describes an investment strategy: a fund seeks to follow an index, by holding all or a sample of its securities. “Mutual fund” and “ETF” describe fund structures. An index fund may be a mutual fund or an ETF; an ETF is not automatically an index fund. Buying individual stocks is different: you own shares in chosen companies, not a fund tracking the index.
| Route | What you own | What to compare | Main trade-off |
|---|---|---|---|
| Nasdaq index mutual fund | Shares in a mutual fund seeking to track a named Nasdaq index. | Index tracked, fees, holdings, full replication or sampling, minimums, dealing terms and account fit. | Fund costs, trading costs and tracking error can make returns differ from the index; terms vary by fund. |
| Nasdaq ETF | Exchange-traded fund shares seeking exposure to a stated index; an ETF may itself be an index fund. | Index tracked, ongoing costs, holdings, tracking difference, liquidity and market price relative to net asset value (NAV). | ETF shares trade at market prices that can be above or below NAV; fund fees and risks vary. |
| Individual Nasdaq-listed stocks | Direct shares in the companies you select. | Company fundamentals, valuation, diversification among holdings, position size and willingness to research and monitor businesses. | Your outcome depends on those companies; an individual stock can fall quickly and substantially. |
The SEC explains how fund costs, index construction, tracking and ETF trading affect investors in its ETF overview.
How to choose an approach
Choose the index before the ticker
Decide whether your intended exposure is to the Composite or the Nasdaq-100. Then confirm the benchmark in the fund’s prospectus and current holdings; a name or ticker that includes “Nasdaq” does not establish which index it tracks. A Nasdaq-100 fund is not equivalent to a fund covering the broad stock market.
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For a mutual fund or ETF, read the latest prospectus and shareholder report. Check the index, holdings, fees and expenses, replication approach, risks and how closely returns have tracked the index. Fees reduce returns, while trading costs and tracking error can also cause a fund to lag its benchmark. The SEC’s index-fund bulletin outlines these considerations.
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Account for how shares trade
Mutual funds and ETFs have different dealing mechanics. ETFs trade on an exchange during market hours, and their market price may not equal NAV. Consider liquidity and any trading costs alongside the fund’s ongoing expenses; the specific terms depend on the fund and brokerage account. The SEC’s ETF overview explains the structure.
Be realistic about selecting individual companies
Buying stocks gives you control over which companies you own, but also makes your results depend on those selections. Researching businesses, considering valuation and managing position size are part of the decision. A collection of Nasdaq-listed stocks does not automatically reproduce either index, and its concentration will depend on the companies you choose.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Examples of Nasdaq-100-linked funds
Nasdaq’s product listing names these examples of funds linked to the Nasdaq-100. They illustrate available product types; they are not endorsements or a complete list.
| Structure | Examples listed by Nasdaq |
|---|---|
| ETFs | Invesco QQQ Trust (QQQ); Invesco Nasdaq-100 ETF (QQQM); State Street SPDR Portfolio Nasdaq 100 ETF (QNDX); iShares Nasdaq 100 ETF (IQQ). |
| Mutual funds | IVNQX; NASDX; NQQQX; USNQX. |
Before acting on a ticker, check the issuer’s current prospectus, expense information, holdings and listing details. Products and terms can change. Nasdaq’s product listing identifies these examples.
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Risks and limits to keep in mind
- Index tracking does not make an investment risk-free or guarantee that it will match its benchmark.
- Nasdaq-linked funds and individual stocks are equity investments; their risk depends on the index and actual holdings, and values can decline.
- A fund tracking the Nasdaq-100 should not be mistaken for a diversified holding across the entire stock market.
- Costs, tax consequences, brokerage charges, spreads and product availability vary by fund, provider, account and jurisdiction. Check current primary disclosures and local rules rather than assuming one product or account works everywhere.
Nasdaq’s educational materials are not recommendations to buy or sell securities, and past performance does not indicate future results. Nasdaq’s explainer.
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