Striking while the index is hot, Nasdaq Stock Market Inc. is creating a new security that will let people invest in its 100 biggest nonfinancial stocks.
The second-largest U.S. stock market filed this week with the Securities and Exchange Commission to sell shares in a unit investment trust called Nasdaq Gold. Each share will track the performance of the Nasdaq 100, an index that has tripled in the last five years, outperforming the better-known Standard & Poor's 500, a barometer of blue-chip stocks.
But the Nasdaq 100 is down 16.7% from its recent peak, and many of its leaders sport lofty valuations. Microsoft Corp., for example, which accounts for 24.7% of the capitalization-weighted index, carries a price-to-earnings ratio of about 55.
By purchasing Nasdaq Gold, investors will simultaneously get stakes in the largest and most actively traded Nasdaq companies, including Intel, Dell Computer and Tele-Communications Inc. The shares would essentially represent a bet on a portfolio of technologies ranging from computers and telecommunications to the Internet.
