Here are 4 of the biggest changes to the Nasdaq 100 from Monday’s special rebalancing

These new levels were shared ahead of time with Goldman Sachs Group Chief U.S. Equity Analyst David Kostin. Kostin and his team have published a report on the changes that was shared with Goldman clients and the press last week.

Here are four of the most important shifts highlighted in Kostin’s note:

• The seven stocks with the heaviest weightings in the Nasdaq 100 are seeing their collective weight reduced to 44% from 56%.

• At the sector level, information technology will continue to account for roughly half of the index, but the sector’s weight will decline to 49% from 51%.

• Apple Inc.
  AAPL,
  +0.59%
  and Microsoft Corp.
  MSFT,
  +0.56%
  will remain the index’s largest constituents, but their index weights will be reduced by roughly four percentage points — to 12% and 10%, respectively.

• Broadcom’s index weight is seeing the biggest increase, and will see its weighting increase by 64 basis points to 3%.

The Goldman analyst summarized how the new weightings would impact the index’s 25 largest constituents in the chart below.

According to Nasdaq representatives, the Nasdaq 100 is the most popular of the exchange’s indexes. So far this year, it has outperformed the Nasdaq Composite, a broader index including every company traded on the exchange. The Nasdaq 100 is up 41.2%, to the Composite’s 34.4%, according to FactSet data.

EPFR data show $261 billion in mutual fund and exchange-traded fund assets are benchmarked to the Nasdaq 100, including the Invesco QQQ Trust Series
QQQ,
+0.30%,
better known by its ticker QQQ. More than $250 billion of this money is invested in passive benchmark-tracking strategies.

Nasdaq decided to implement the special rebalancing earlier this month to try and ward off concentration risk after its seven largest components surged earlier this year. According to its official index-management methodology, Nasdaq aims to keep the combined weighting of its largest constituents to 40%.

Kostin said he doesn’t expect these changes to have much of an impact on markets, arguing that the previous special rebalancing didn’t move the index much, either.

Both the Nasdaq 100 and Nasdaq Composite were slightly lower on Monday as big-tech names continued to lag the S&P 500 and suddenly high-flying Dow Jones Industrial Average
DJIA,
+0.60%,
just like they did last week.

Nasdaq 100-tracking QQQ
QQQ,
+0.30%
was off by 0.2% at $374 per share Monday morning, while the Nasdaq Composite
COMP,
+0.34%
was down 0.2% at 14, 013.