NZSDAQ 100 INDEX

DEFINITION of 'Nasdaq 100 Index'

The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. These non-financial sectors include retail, biotechnology, industrial, technology, health care and others.

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BREAKING DOWN 'NASDAQ-100'

The Nasdaq 100 is traded through the PowerShares QQQ Trust, designed to track the performance of the 100 largest companies on the Nasdaq exchange. Each company in the trust must be a member of the Nasdaq 100 and be listed on the broader exchange for at least two years. Some exceptions are made for newly public companies that have extremely high market capitalizations. In addition, listed stocks need to have an average daily trading volume of 200,000 and publicly report earnings quarterly and annually. Companies with bankruptcy issues are omitted from the PowerShares QQQ Trust. On occasion, the composition of the trust may not identically match the Index, but the main objective of the QQQ is still to track the price and performance of the underlying index.
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COMPOSITION OF 'NSDX'

The Nasdaq 100 Index is composed of assets in various sectors excluding financial services. A large portion of the index covers the technology sector, which accounts for 54% of the index's weight. The next largest sector is consumer services, represented by companies like restaurant chains, retailers, and travel services. These stocks account for nearly a quarter of the cap weight thanks to the continued growth of retail giant Amazon (AMZN). Rounding out the index is healthcare, industrials and telecommunications. The diversity of companies included in the Nasdaq 100 helped drive strong returns for the past two decades.
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INITIAL ELIGIBILITY CRITERIA

• To be eligible for initial inclusion in the Nasdaq-100 Index ("The Index"), an Index Security must meet the following criteria:
• the issuer of the security's primary U.S. listing must be exclusively listed on the Nasdaq Global Select Market or the Nasdaq Global Market(unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing);
• a security must be issued by a non-financial company;
• a security may not be issued by an issuer currently in bankruptcy proceedings;
• a security must have average daily trading volume of at least 200,000 shares (measured annually during the Ranking Review process);
• if the issuer of the security is organized under the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S. (measured annually during the Ranking Review process);
• the issuer of the security may not have entered into a definitive agreement or other arrangement which would likely result in the security no longer being Index eligible;
• the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn;
• the security must have "seasoned" on Nasdaq, NYSE or NYSE Amex. Generally, a company is considered to be seasoned if it has been listed on a market for at least three full months (excluding the first month of initial listing).

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DETAILED INITIAL ELIGIBILITY CRITERIA

• Listings

For inclusion in the Index, an Index Security must be listed exclusively on the Nasdaq Global Select Market or Nasdaq Global Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing).

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• Security Types

Security types generally eligible for the Index include common stocks, ordinary shares, ADRs, and tracking stocks. Security or company types not included in the Index are closed-end funds, convertible debentures, exchange traded funds, limited liability companies, limited partnership interests, preferred stocks, rights, shares or units of beneficial interest, warrants, units and other derivative securities. The Index does not contain securities of investment companies.

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• Market Capitalization

There is no minimum market capitalization requirement. Inclusion will be determined based on the top 100 largest issuers based on market capitalization meeting all other eligibility requirements. Market capitalization is determined by multiplying a security's Last Sale Price3 by itstotal shares outstanding.

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• Liquidity

Each security must have a minimum three-month average daily trading volume (ADTV) of 200 thousand shares. The ADTV is determined by the average of the sum product ofthe security's daily trading volume for each day during the previous three month period.

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• Security Seasoning Criteria

The security must have been traded for at least full three months, not including month of initial listing, on Nasdaq, NYSE or NYSE Amex.

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DISCLAIMER

Nasdaq may, from time to time, exercise reasonable discretion as it deems appropriate in order to ensure Index integrity including but not limited to quantitative inclusion criteria. Nasdaq may also, due to special circumstances, if deemed essential, apply discretionary adjustments to ensure and maintain the high quality of the index construction and calculation. Nasdaq does not guarantee that any Index accurately reflects future market performance.
Neither Nasdaq, Inc. nor any of its affiliates (collectively "Nasdaq") makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Investors should undertake their own due diligence and carefully evaluate companies before investing. The information contained herein 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. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

LIMITS OF LIABILITY

Nasdaq, Inc. and its affiliates ("Nasdaq") assume no liability of any nature (including, but not limited to negligence) for any loss, damages, costs, claims and expenses related to or arising out of the use of the Indexes or any data included therein. Nasdaq expressly disclaims all warranties, expressed or implied, as to the availability, accuracy, uninterrupted calculation, completeness, merchantability or fitness for a particular purpose with respect to the Indexes or any data included therein. Neither Nasdaq nor any third party makes any express or implied warranties or representations with respect to the Indexes, the results to be obtained by their use or the value of the Indexes at any given time. Without limiting any of the foregoing, in no event shall Nasdaq have any liability for any direct damages, lost profits or special, incidental, punitive, indirect, or consequential damages, even if notified of the possibility of such damages.

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