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Nasdaq vs. Dow Jones

Find out the key differences between these two major indexes, plus key points to consider before investing.

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.

Here’s how the Nasdaq index and Dow Jones compare in 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 called “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 not included. 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 weighted by price, which means each stock impacts 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 index vs. Dow Jones: Which is bigger?

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

Nasdaq index vs. Dow Jones: Which is worth more?

The Nasdaq Composite’s market capitalization is likely close to the Nasdaq stock exchange’s market cap of $23.46 trillion USD. Meanwhile, the Dow Jones has a market capitalization of $10.35 trillion USD.

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 stocks in the Dow Jones are.

Nasdaq index vs. Dow Jones: Which is more diversified?

If you invest in a fund that mimics the performance of the Dow Jones index, you’re 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 index tracks a lot of technology stocks, with stocks in this sector made up of half of the Nasdaq exchange. It’s spread out across other sectors as well, but technology is the key one. Tech 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.

Best for beginners

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Commission-free stock trading
  • No-cost financial planning and automated investing
  • $0 commission on stocks, ETFs and options
  • Get up to $1,000 in stock when you fund a new account within 30 days

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$200 in US stocks
  • Trade options, futures, options on futures, stocks, ETFs
  • $0 commission to close options
  • Get $100-$5,000 when you open an account with $5,000 to $1,000,000+

Top pick for interest on uninvested cash

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Easy access to diverse assets
  • Trade stocks, bonds, options, ETFs, crypto, Treasurys, collectibles, royalties
  • Earn 5.1% APY on your cash
  • Earn a $0.18 rebate on options, with no commissions and no per-contract fees

What’s the best Dow Jones and Nasdaq index fund?

Compare performance data for popular Dow Jones and Nasdaq funds.

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

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

Zoe Stabler

Finder expert Zoe Stabler answers

The Nasdaq Composite index 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 index is a 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 index?

Dow JonesNasdaq Composite
Picture not describedApplePicture not describedApple
Microsoft logoMicrosoftMicrosoft logoMicrosoft
Johnson & Johnson logoJohnson & JohnsonPicture not describedAmazon
United Health Group logoUnitedHealthTesla logoTesla
Visa logoVisaPicture not describedNVIDIA

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 - 5 of 5
Name Product Available asset types Annual fee Signup bonus
SoFi Invest®
Finder Score: 4.1 / 5: ★★★★★
SoFi Invest®
Stocks, Options, Mutual funds, ETFs, Alternatives
0%
Get up to $1,000 in stock
when you fund a new account within 30 days
Tastytrade
Finder Score: 4.6 / 5: ★★★★★
Tastytrade
Stocks, Options, ETFs, Cryptocurrency, Futures, Treasury Bills
0%
Get $100-$5,000
when you open and fund an account with $5,000 to $1,000,000+
Highly commended for Best Derivatives Trading Platform award.
Public.com
Finder Score: 4.1 / 5: ★★★★★
Public.com
Stocks, ETFs, Cryptocurrency, Art, Treasury Bills, Collectibles
0%
N/A
2.5% fee applies to all alternative asset transactions.
Robinhood
Finder Score: 4.3 / 5: ★★★★★
Robinhood
Stocks, Options, ETFs, Cryptocurrency
0%
Get a free stock
when you successfully sign up and link your bank account.
Try Robinhood Gold for 30 days risk-free upon signup and earn a 5% APY on your uninvested cash, a 3% match on IRA contributions, up to $50,000 in instant deposits and more. Accounts are auto-downgraded after the trial period.
Moomoo
Finder Score: 4.7 / 5: ★★★★★
Exclusive
Moomoo
Stocks, Options, ETFs
N/A
Choose a 1.5% match or 7 free fractional shares
when you open a new account and meet funding requirements
No commission stock and ETF trading, with a chance to get a 1.5% cash reward match or 7 free fractional shares.
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Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.

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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