From Benchmarks to Building Portfolios: Using Nasdaq® Indexes To Guide Your Investment Strategy

Building a diversified and strategic portfolio once meant owning a few blue-chip stocks, some bonds, and perhaps a mutual fund or two. But modern investors are navigating a landscape where a simple 60/40 type portfolio strategy may not capture all the market opportunities for upside. But picking individual winners can be an impossible task. That’s where index investing comes in.

Indexes extend beyond the Nasdaq-100®s and S&P 500s of the world, although these indexes are generally respected as stock market benchmarks and tracked by some of the world’s largest ETFs. Nasdaq Global Indexes go further to distill market complexity into clear and practical economic indicators. An index reflects the health, direction, and innovation of an economy, showing investors not only how their portfolios stack up, but where the opportunities may lie.

Beyond benchmarking, Nasdaq indexes are increasingly used as building blocks for investing strategies. They can help signal long-term economic growth themes, or serve as the foundation for cash income through dividend- or options-based strategies. Whether you’re seeking growth, managed risk, or income, Nasdaq indexes provide a rules-based framework that can guide the process of portfolio construction.

Indexes for growth

Every market era has its defining force — and it’s no secret that today's market engine is technology. As of October 21 2025, the tech giants known collectively as the Magnificent or Mag 7 account for 37% of the S&P 500’s entire market cap, more than a third of the whole index. For investors, the question is no longer whether technology will shape the future, but how best to capture its potential.

That’s where Nasdaq’s flagship index can figure in an investor’s toolbelt. The Nasdaq-100 Index®, a globally renowned benchmark made up of 100 of the most innovative large-cap companies listed on the Nasdaq Stock Market®. It includes household names in technology, healthcare, and consumer services — familiar companies that have redefined how the modern world works.

The Nasdaq-100 has become a portfolio staple, helping investors to benchmark the pace and shape of economic innovation. The Nasdaq-100’s historical outperformance of other large-cap benchmarks in recent years, for example, has demonstrated the market’s ongoing shift toward technology and services. In and of itself, the index provides a window into the forces shaping tomorrow’s economy — but its broad yet focused constitution has also made it an attractive basis for investable products, underpinning numerous ETFs, options, futures and annuities.

That said, Nasdaq’s global indexes extend further than its well-known flagship. Nasdaq is also home to a diverse suite of thematic indexes that are focused on emerging megatrends. Designed to capture long-term growth opportunities across sectors like AI, cybersecurity, cryptocurrency, and semiconductors, these indexes can be utilized by investors to track and leverage global technology trends, identifying the companies at the forefront of transformative industries.

Unlike traditional sector indexes, Nasdaq’s thematic indexes are sector-agnostic, meaning they focus on ideas rather than rigid classifications. An energy infrastructure index, for instance, might include utilities, materials, and semiconductor firms which are united by their role in advancing a low-carbon future. Each index is also regularly updated to reflect new market leaders, ensuring it evolves alongside the trend it aims to capture.

While you can’t invest in indexes directly, most investors opt to track more concentrated, thematic indexes through ETFs. This offers streamlined access to a basket of stocks from companies that are furthering the progress of a particular trend. For an investor, selection might be value-oriented, strategic within a given portfolio, or targeted on a particular theme. However you choose to use them, Nasdaq provides complete data on every index openly available to everyone.

Indexes for income

Of course, not all investors strategize solely for growth. Particularly as markets mature and volatility becomes commonplace, investors might look to income-focused strategies and target steady, reliable returns that can help smooth the ride through uncertain conditions. Nasdaq’s index innovation is there to help investors adapt.

In fact, Nasdaq indexes can (and do) figure centrally in an array of investment strategies focused on ways of generating yield. From time-tested approaches like dividend investing to more advanced techniques like options overlays, Nasdaq indexes are foundational to a growing set of tools that are designed to balance income and growth.

Some of these strategies are built around well-known benchmarks like the Nasdaq-100. Although primarily known for its growth attributes and not as a traditional income vehicle, many of its constituents — such as Microsoft, Apple, and PepsiCo — pay regular dividends and have steadily increased them over time. While it’s not an “income index” per se, the Nasdaq-100 forms the baseline for derivative indexes and income-oriented products that transform growth exposure into yield.

Concurrently, the Nasdaq-100 also underpins a growing suite of income-oriented products (namely enhanced income ETFs) that build in options products to create yield. A handful of these include the Global X Nasdaq-100 Covered Call ETF (QYLD), Goldman Sachs Nasdaq-100 Premium Income ETF (GPIQ), and Invesco QQQ Income Advantage ETF (QQA).

These types of products allow investors to track Nasdaq’s innovation-led benchmarks in their portfolios while targeting regular cash flow through covered call writing or option premium income. Fundamentally, they offer balance for investors who want to remain invested in growth-oriented companies but also take a more defensive, income-producing approach.

Income innovation isn’t just about maximizing yield; it’s about targeting growth for the long-term by managing risk that makes it possible to stay invested through every phase of the cycle. Nasdaq Global Indexes form the basis of many income-generating strategies that strike that balance and make these strategies accessible to everyday investors.

Leveling up with index investing 

Behind every index, there’s a powerful ecosystem built from exchanges, data, analytics, and strategic partnerships that connect ideas to opportunity. Nasdaq is the thread that weaves the trusted fabric of the financial system — and the result is market-leading index solutions designed to meet the evolving needs of investors at every stage of their journey.

Through technology benchmarks like the Nasdaq-100, thematic indexes capturing emerging megatrends, or income strategies designed for resilience, Nasdaq’s index family serves as an industry-grade toolkit for the modern investor. By using indexes as a framework, investors can position themselves for the future economy while maintaining the structure that indexing provides.

Explore how Nasdaq’s expertly-built indexes are helping investors navigate a world in motion — empowering you to become a stakeholder in the future of technology.

Disclaimer:

Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, and Nasdaq Stock Market® are registered trademarks of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.