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Nasdaq vs Dow Jones

Find out the key differences between the Nasdaq and Dow Jones plus key points to consider before investing.

View popular stocks in both indices Jump to stock list
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The Nasdaq is a US exchange on which stocks are bought and sold, whereas the Dow Jones is an index that tracks 30 major stocks listed on US exchanges. The Nasdaq Composite is an index that tracks most of the stocks listed on the Nasdaq exchange.

These terms might sounds similar, but they’re actually very different. Here’s how the Nasdaq and Dow Jones compare in terms of size, value, diversification and performance.

What's the difference between a stock exchange and an index?

A stock exchange is an electronic marketplace on which stocks (and other securities) are traded. An index tracks market performance by tracking the performance of a group of stocks.

Stocks can be tracked in more than one index. An index can group stocks by sector, industry, region or any other characteristic. Think of a stock exchange as Spotify and an index as a playlist.

Nasdaq vs Nasdaq Composite

The Nasdaq Composite (sometimes confusingly referred to as simply “the Nasdaq”) is a stock market index that tracks most of the stocks listed on the Nasdaq stock exchange.

When people talk about investing in a Nasdaq fund or exchange-traded fund (ETF), they’re likely referring to a fund that holds stocks listed on the Nasdaq Composite. As an index, it’s easier to compare to the Dow Jones.

To be included in the Nasdaq Composite, a stock must be a common stock and listed exclusively on the Nasdaq exchange. Preferred stocks and ETFs are excluded. The index is supposed to represent the whole Nasdaq, not just its largest stocks.

The Dow Jones

The Dow Jones is an index that tracks 30 prominent US companies. It’s price-weighted, so each stock will impact the index’s performance in proportion to its price. The companies in the Dow Jones are chosen by representation from The Wall Street Journal and S&P Global, which is somewhat subjective.

Popular stocks in the Nasdaq Composite and Dow Jones

Nasdaq

  • Apple
  • Microsoft
  • Amazon
  • Tesla
  • NVIDIA
  • Alphabet (C shares)
  • Alphabet (A shares)
  • Meta Platforms
  • ASML Holding
  • Broadcom

Dow Jones

  • Apple
  • Microsoft
  • Johnson & Johnson
  • UnitedHealth
  • Visa
  • Walmart
  • Procter & Gamble
  • JPMorgan Chase
  • Home Depot
  • Chevron

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Nasdaq vs Dow Jones: Which is bigger?

The Nasdaq Composite is larger than the Dow Jones by a pretty substantial margin. The Dow Jones only tracks 30 stocks, while the Nasdaq Composite tracks more than 2,500 stocks.

Nasdaq vs Dow Jones: Which is worth more?

The Nasdaq Composite’s market capitalization is likely very close to the Nasdaq stock exchange’s market cap, which is $23.46 trillion USD (around $32.04 trillion CAD). Meanwhile, the Dow Jones has a market capitalization of $10.35 trillion USD (about $14.13 trillion CAD).

When you consider that the Dow Jones tracks just 30 stocks and the Nasdaq Composite tracks a couple thousand stocks, you get a sense of how large the stocks in the Dow Jones are.

Nasdaq vs Dow Jones: Which is more diversified?

If you invest in a fund that mimics the performance of the Dow Jones index, you’ll only be exposed to the performance of 30 big players on US exchanges. Investing in a fund that mimics the performance of the Nasdaq Composite gives you access to those stocks plus a range of smaller companies. This can be riskier, but there might be an opportunity for greater growth.

The Nasdaq Composite tracks a lot of technology stocks, with stocks in this sector comprising half of the Nasdaq exchange. It’s quite spread out across other sectors as well, but tech is the key one. Technology is the largest sector represented in the Dow Jones, with 20% of stocks falling into this sector.

Platforms that let you invest in the Nasdaq and Dow Jones

These trading apps allow you to invest in companies within the indices or funds that track these companies.

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  • Access to international stock exchanges
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What’s the best Dow Jones and Nasdaq index fund?

Compare performance data for popular Dow Jones and Nasdaq funds:

IconFund5-year performanceLink to invest
iShares logoiShares Dow Jones U.S. ETF (IYY)10.85%Invest with Interactive Brokers
SPDR logoSPDR Dow Jones Global Real Esta (SPYJ)3.62%Invest with Interactive Brokers
Lyxor logoLyxor Dow Jones Industrial Average (LUX) UCITS ETF (C010)10.76%Invest with Interactive Brokers
IconFund5-year performanceLink to invest
iShares logoiShares NASDAQ 100 Index ETF (CAD-Hedged) (XQQ)14.11%Invest with Interactive Brokers
Invesco logoInvesco NASDAQ 100 Index ETF (QQC)0.00%Invest with Interactive Brokers
Lyxor logoLyxor Nasdaq-100 UCITS ETF – Ac (LYMS)N/AInvest with Interactive Brokers
Picture not describedBetaPro NASDAQ-100 -2x Daily Bear ETF (HQD)-36.15%Invest with Interactive Brokers
Fidelity logoFidelity NASDAQ Composite Index Fund (FNCMX)8.14%Invest with Interactive Brokers

Is it better to invest in the Dow Jones or the Nasdaq?

Zoe Stabler

Finder expert Zoe Stabler answers

The Nasdaq Composite has performed better than the Dow Jones historically, although you shouldn’t take this to mean that it will in the future. It is more diversified and gets you access to blue-chip stocks as well as smaller players in the market. The Dow Jones gets you access to large companies, particularly technology companies.

The Nasdaq Composite is a pretty well-diversified set of shares alone, although you’d want to add some global diversification by investing in some stocks in other countries.

The Dow Jones could be paired with other index funds or ETFs as it’s only 30 companies and doesn’t offer much diversification.

What are the top holdings in the Dow Jones and Nasdaq?

Dow JonesNasdaq
Apple logoAppleApple logoApple
Microsoft logoMicrosoftMicrosoft logoMicrosoft
Johnson & Johnson logoJohnson & JohnsonAmazon logoAmazon
United Health Group logoUnitedHealthTesla logoTesla
Visa logoVisaNvidia logoNVIDIA

How to invest in the Dow Jones and Nasdaq Composite

  1. Find a Nasdaq and Dow Jones ETF or mutual fund. Some index funds track the performance of all stocks on the index, whereas others only track a certain number of stocks or are weighted towards specific stocks. Select the fund that best suits your investment goals.
  2. Open a stock trading account. To invest in ETFs or mutual funds, you’ll need to open a trading account with a broker or trading platform. Keep in mind that some index funds may only be available on certain brokerages or platforms. The providers in our comparison table let you invest in Canadian and international stocks. Some of the index funds above are listed on the Toronto Stock Exchange (TSX).
  3. Deposit funds. You’ll need to deposit funds into your account to begin trading. You may need to pay a foreign conversion fee to convert your Canadian dollars into US dollars, so you can buy US stocks.
  4. Buy the index fund. Once your money has been deposited, you can buy the index fund. Most ETFs or index funds come with a small annual fee to cover fund management expenses.

Compare Dow Jones and Nasdaq trading platforms

These trading apps allow you to invest in companies within the indices or funds/ETFs that hold stocks in Nasdaq and Dow Jones companies.

1 - 6 of 6
Name Product Finder Rating Stock Trading Fee Account Fee Available Asset Types Offer
Interactive Brokers
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4.1 / 5
min $1.00, max 0.5%
$0
Stocks, Bonds, Options, ETFs, Currencies, Futures
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Scotia iTRADE
Finder Rating:
★★★★★
3.8 / 5
$4.99–$9.99
$0
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, IPOs
Get up to $2,000 cash and $6.99 stock and ETF commission pricing. Conditions apply.
OFFER
CIBC Investor's Edge
Finder Rating:
★★★★★
4 / 5
$4.95–$6.95
$0 if conditions met, or $100
Stocks, Bonds, Options, Mutual Funds, ETFs
Get 100 free online stock or ETF trades and up to $3,000 cash back. Conditions apply.
FREE TRADES
National Bank Direct Brokerage
Finder Rating:
★★★★★
4.1 / 5
$0
$0 if conditions met, or $100
Stocks, Bonds, Options, Mutual Funds, GICs
$0 commission on all transactions for Finder investors.
Questrade
Finder Rating:
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4.2 / 5
$4.95 - $9.95
$0
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
Get $50 in free trades when you fund your account with a minimum of $1,000.
OFFER
Qtrade Direct Investing
Finder Rating:
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4.1 / 5
$6.95 - $8.75
$0 if conditions met, otherwise $25/quarter
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
Get up to $2,000 cashback + a $50 bonus on sign up. Use promo code CASHBONUS2023. Conditions apply. Ends March 1, 2023.
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Compare up to 4 providers

Bottom line

The Nasdaq is a stock exchange in the US, known for listing a high proportion of technology stocks. The Nasdaq Composite tracks most of the stocks listed on the Nasdaq. The Dow Jones is an index that tracks 30 major US stocks. Dow Jones stocks are hand picked, whereas Nasdaq Composite stocks include all stocks that meet certain basic criteria.

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Frequently asked questions


Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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