The Nasdaq Stock Market, Inc. (NASDAQ®; NASDAQ:NDAQ) announced today the annual re-ranking of the NASDAQ-100 Index®, effective with the market open on Monday, December 18, 2006.
“The NASDAQ-100 Index is one of the world’s most recognized benchmarks that owes this distinction to its components: companies that are leaders in a diverse range of industries,” said NASDAQ Executive Vice President John L. Jacobs. “The annual re-ranking of the NASDAQ-100 Index is an objective, transparent process that culminates in the formation of a select group of companies in a global benchmark that is the basis of dozens of licensed innovative investment products throughout the world.”
The following 3 issues will be added to the NASDAQ-100 Index: Level 3 Communications Inc. (NASDAQ:LVLT), Infosys Technologies Ltd. (NASDAQ:INFY), and Vertex Pharmaceuticals Inc. (NASDAQ:VRTX).
The NASDAQ-100 Index is composed of the 100 largest non-financial stocks on The NASDAQ Stock Market? and dates to January 1985 when it was launched along with the NASDAQ Financial-100 Index?, which is comprised of the 100 largest financial stocks on NASDAQ. These indexes were originally designed to segment NASDAQ into two major industry groups to support media coverage and to act as benchmarks for licensed financial products such as options, futures, and funds. The NASDAQ-100 is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.
On a cumulative price return basis, the NASDAQ-100 Index has risen over 1,333% since inception, and it has outperformed several major domestic and international stock indexes for the ten-year period ended November 30, 2006, although past performance is not indicative of future performance. For the most recent one, five, and ten-year periods ended November 30, 2006, the cumulative return of the NASDAQ-100 Index was 7.1%, 12.2%, and 114.8% respectively.
Shares of each company in the Index are included in the NASDAQ-100 Index Tracking Stock? (QQQ?) (NASDAQ:QQQQ), which is an exchange-traded fund (ETF) that trades like a stock. It is the most actively traded listed equity security in the U.S. and one of the world’s most actively traded ETFs as measured by the average daily share trading volume¹. QQQ represents ownership in the NASDAQ-100 TrustSM. The Trust holds a portfolio of equity securities that comprise the NASDAQ-100 Index and aims to provide investment results that, before expenses, correspond with the performance of the NASDAQ-100 Index. Since its inception in March 1999, the Trust’s total assets have grown to over $18 billion.
The NASDAQ-100 European Tracker Fund? (EQQQSM) is listed on Borsa Italiana, SWX Swiss Exchange, Deutsche Boerse, virt-x, and London Stock Exchange. EQQQ provides European investors with low cost access to the entire range of companies in the NASDAQ-100 Index in European hours, on European markets. Since its inception in November 2002, the Fund’s total assets have grown to approximately $425 million. EQQQ is not available to U.S. investors.
As a result of the re-ranking of the NASDAQ-100 Index, the following 3 companies will be removed: JDS Uniphase Corporation (NASDAQ:JDSU), Lincare Holdings Inc. (NASDAQ:LNCR), and Urban Outfitters, Inc. (NASDAQ:URBN).
NASDAQ is the largest U.S. electronic stock market. With approximately 3,200 companies, it lists more companies and, on average, its systems trade more shares per day than any other U.S. market. NASDAQ is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks. For more information about NASDAQ, visit the NASDAQ Web site at http://www.nasdaq.com or the NASDAQ Newsroom at http://www.nasdaq.com/newsroom/.
The Trustee for the NASDAQ-100 Trust is required to adjust the composition of the Trust within three business days before or after the day on which a change to the composition of the NASDAQ-100 Index becomes effective at the close of the market.
The NASDAQ-100 Index Tracking Stock is subject to risks similar to those of stocks, including those regarding short selling and margin account maintenance. An investor cannot invest directly in the Index. Index performance does not reflect the fees and expenses associated with investing in the NASDAQ-100 Index Tracking Stock.
An investor should carefully consider investment objectives, risks charges and expenses before investing. For this and more complete information about NASDAQ-100 Index Tracking Stock?, a unit investment trust, obtain a prospectus from your broker, or call (888) 627-3837 or visit our Web site at www.nasdaq-100.com. Read it carefully before you invest.
While there is no assurance that the performance of the NASDAQ-100 Index can be fully matched, the NASDAQ-100 Index Tracking Stock is designed to provide investment results that generally correspond to the performance of the NASDAQ-100 Index before fees, expenses, and taxes. Past performance is not indicative of future performance.
ALPS Distributors, Inc., a registered broker-dealer, is distributor for the Trust.
The sponsor of the NASDAQ-100 Trust, a unit investment trust, is NASDAQ Global Funds, Inc. (“NGF”), a wholly owned subsidiary of The Nasdaq Stock Market, Inc. (“NASDAQ,” and collectively with its affiliates except NGF, the “Corporations”). Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed or sold, may be worth more or less than the original cost.
“NASDAQ” and related marks are trademarks or service marks of NASDAQ and have been licensed for use for certain purposes by NGF. The NASDAQ-100 Index is comprised and calculated by NASDAQ without regard to the NASDAQ-100 Index Tracking Stock. The Corporations make no warranty, express or implied, and bear no liability with respect to NASDAQ-100 Index Tracking Stock. The Corporations and NGF make no warranty, express or implied, and bear no liability with respect to the NASDAQ-100 Index, its use or any data included therein. The Corporations do not guarantee the accuracy or the completeness of the Index, or any data used to calculate the Index.
ALPS Distributors, Inc., a registered broker-dealer, is distributor for QQQ.
The following are brief descriptions of the 3 companies to be added to the NASDAQ-100 Index in descending order based on market capitalization as calculated in the NASDAQ-100 Index annual re-ranking review. Securities listed on the NASDAQ Stock Market that meet the eligibility criteria were ranked by market capitalization using NOCP as of the end of October and total shares outstanding filed in a public SEC document through the end of November.
Level 3 Communications, Inc. provides telecommunications services, including local, long distance, and data transmission. The Company also provides other enhanced communications and Internet services. The Broomfield, Colorado, company had a market capitalization of $6.2 billion at the time of ranking.
Infosys Technologies Limited provides IT consulting and software services, including e-business, program management and supply chain solutions. The Group’s services include application development, product co-development, and system implementation and system engineering. Infosys targets businesses specializing in the insurance, banking, telecommunications, and manufacturing sectors. The Banaglore, India, company’s American depositary shares had a market capitalization of $5.6 billion at the time of ranking.
Vertex Pharmaceuticals Incorporated is a global biotechnology company committed to the discovery and development of breakthrough small molecule drugs for serious diseases. Vertex's product pipeline is focused on hepatitis C, inflammation, autoimmune diseases, cystic fibrosis, cancer, pain and bacterial infection. Vertex co-discovered the HIV protease inhibitor, Lexiva. The Cambridge, Massachusetts, company had a market cap of $5.1 billion at the time of ranking.
Cautionary Note Regarding Forward-Looking Statements The matters described herein may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about the changes to and expected benefits of the NASDAQ-100 Index or the NASDAQ-100 Index Tracking Stock. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the control of The Nasdaq Stock Market, Inc., which could cause actual results to differ materially from historical results, performance or other expectations and from any opinions or statements expressed or implied with respect to future periods. These factors include, but are not limited to, NASDAQ’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in the Company's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.
¹As of November 30, 2006 (Source: FactSet Research Systems, Inc).