What Concentration Has Been Worth Inside the Nasdaq-100
The same hundred companies, weighted two ways. QQQ weights them by market value; QQEW holds each at roughly one percent. The gap between the two lines is what weighting alone contributed, and it runs the opposite way to the reason people usually buy equal weight.
Every line is a fund you could have owned. Equal-weighting today’s index members and carrying them backward would show 34.63× since 2010 against the real fund’s 8.25× — the survivorship error this page exists to avoid.
Latest read
Since April 25, 2006 the cap-weighted Nasdaq-100 has returned +1642% against +722% for the same hundred companies held equally, which is 2.12× the return or 4.2 percentage points a year. Equal weighting has lost here, the reverse of the pattern it is usually bought for. Over the same window the S&P technology sector fund returned +1601%, within a few percent of QQQ despite holding a different list of companies.
Sources, methodology & freshnessLast updated 2026-09-04 · Open ↓Close ↑
Reading the gap
- Same companies, different weights. QQQ and QQEW hold the identical list, so nothing between the two lines is stock selection. It is weighting.
- XLK answers a different question. It is S&P technology, so it excludes Nasdaq’s consumer and healthcare members and includes NYSE tech. Overlap with QQQ is a result here, not a definition.
- Dividends are excluded. These are price returns, which understates all three lines and understates the higher-yielding one most.
- Funds, not a rebuilt index. Reconstructing equal weight from today’s members overstates it 4.20× — the reason every line here is tradeable.
The same hundred companies, weighted two ways
The premium, as one line
Persistent edge, or a few decisive years?
A cumulative chart makes any premium look like one long trend. The cap-weighted fund beat equal weight in 15 of 20 complete calendar years, so the edge is real and repeated. The years it lost are large enough that the average year is still a poor description of it.
- QQQ
- +17%
- QQEW
- +14%
- XLK
- +30%
- QQQ
- +20%
- QQEW
- +14%
- XLK
- +24%
- QQQ
- +25%
- QQEW
- +6%
- XLK
- +21%
- QQQ
- +54%
- QQEW
- +32%
- XLK
- +55%
- QQQ
- −33%
- QQEW
- −25%
- XLK
- −28%
- QQQ
- +27%
- QQEW
- +17%
- XLK
- +34%
- QQQ
- +48%
- QQEW
- +37%
- XLK
- +42%
- QQQ
- +38%
- QQEW
- +35%
- XLK
- +48%
- QQQ
- −1%
- QQEW
- −6%
- XLK
- −3%
- QQQ
- +32%
- QQEW
- +25%
- XLK
- +32%
- QQQ
- +6%
- QQEW
- +6%
- XLK
- +13%
- QQQ
- +8%
- QQEW
- +2%
- XLK
- +4%
- QQQ
- +18%
- QQEW
- +18%
- XLK
- +16%
- QQQ
- +35%
- QQEW
- +39%
- XLK
- +24%
- QQQ
- +17%
- QQEW
- +14%
- XLK
- +13%
- QQQ
- +3%
- QQEW
- −3%
- XLK
- +1%
- QQQ
- +19%
- QQEW
- +20%
- XLK
- +10%
- QQQ
- +55%
- QQEW
- +59%
- XLK
- +49%
- QQQ
- −42%
- QQEW
- −44%
- XLK
- −42%
- QQQ
- +19%
- QQEW
- +10%
- XLK
- +15%
Why this page uses funds and not an index we built
The natural way to build an equal-weight Nasdaq is to take today’s hundred members and average their returns backward. That construction returns 34.63× since 2010 against the real fund’s 8.25×. It overstates by more than four times, because today’s membership is the set that survived sixteen annual reconstitutions and the companies dropped along the way are the ones that fell. Only 70 of the current 102 members even had a price in 2010.
The error grows with the lookback: 4.2× from 2010, 3.9× from 2016, 1.8× from 2021. That is the shape of survivorship, and it is why every line here is a fund somebody could actually have held. The same discipline governs the valuation basket, where a fixed cohort sits beside the headline for the same reason.
Every line is a fund you could have owned. Equal-weighting today’s index members and carrying them backward would show 34.63× since 2010 against the real fund’s 8.25× — the survivorship error this page exists to avoid.
Reading the gap
- Same companies, different weights. QQQ and QQEW hold the identical list, so nothing between the two lines is stock selection. It is weighting.
- XLK answers a different question. It is S&P technology, so it excludes Nasdaq’s consumer and healthcare members and includes NYSE tech. Overlap with QQQ is a result here, not a definition.
- Dividends are excluded. These are price returns, which understates all three lines and understates the higher-yielding one most.
- Funds, not a rebuilt index. Reconstructing equal weight from today’s members overstates it 4.20× — the reason every line here is tradeable.
How Nasdaq Equal Weight Works
- 1Compare the same hundred companies under two weightingsQQQ weights the Nasdaq-100 by market value, so its largest holdings dominate the return. QQEW holds the same companies at roughly one percent each and rebalances quarterly. Because the membership is identical, the gap between the two lines is the contribution of weighting alone — not stock selection, not sector, not timing.
- 2Use funds, never a reconstructed indexEvery series here is a tradeable fund. The obvious alternative is to equal-weight today's index members and carry them backward, and it is wrong by a factor: that construction returns 34.6x since 2010 against QQEW's real 8.3x. Today's membership is the survivors of sixteen annual reconstitutions, and only 70 of the 102 current members even had a price in 2010.
- 3Ask the sector question separatelyXLK holds S&P 500 technology companies, so it overlaps the Nasdaq-100 without matching it: it excludes non-S&P names, excludes the Nasdaq's consumer and healthcare members, and includes NYSE-listed technology. Comparing QQQ against it asks whether the Nasdaq has been a bet on concentration or simply a bet on the sector.
- 4Score every calendar year, not only the cumulative lineA single cumulative chart makes a premium look like one long trend. The year-by-year scoreboard shows how often the cap-weighted fund actually won, which is the difference between a persistent edge and a handful of decisive years.