Nasdaq vs Dow Jones

Find out the key differences between the Nasdaq Composite and the Dow Jones Industrial Average, plus some key points to consider before investing.

See the top company holdings Top holdings for each fund
NASDAQ vs Dow Jones performance Compare historical data

The key thing to understand is that the Nasdaq is a stock exchange in the US, meanwhile, the Dow Jones is a stock market index.

So, the Nasdaq is where thousands of companies are publicly listed (with a tilt towards tech stocks) and the Dow Jones (full name Dow Jones Industrial Average) is basically a list of 30 blue-chip stocks listed on the Nasdaq and New York Stock Exchange (NYSE).

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

A stock exchange is where the shares of companies are listed, while an index is a list or collection of stocks. Think of a stock exchange as Spotify and think of an index as a playlist — that’s the basic difference between them.

Nasdaq

Although the Nasdaq is a stock exchange, there are index funds and exchange-traded funds (ETFs) that copy all or part of the Nasdaq.

For example the Nasdaq Composite index follows most stocks listed on the Nasdaq exchange or the Nasdaq 100 is made up of the 100 largest companies on the exchange.

This can be confusing, but most of the time when people talk about investing in a Nasdaq fund or ETF, they’re likely talking about one of these indices. As the Nasdaq Composite is an index, it’s easier to compare it to the Dow Jones.

The Dow Jones

The Dow Jones is an index of 30 prominent US companies. It’s price-weighted, so the share price of each company impacts the proportion of the index that it represents. The Dow index covers all industries except transportation and utilities.

The companies in the Dow Jones are chosen by representation from The Wall Street Journal and S&P Global, so they can be subjective and it’s becoming an outdated measure to look at the US market.

List of top 10 stocks from Nasdaq Composite and Dow Jones

Here’s what the top holdings in each index currently looks like (as of May 2024):

Nasdaq

  • Microsoft
  • Apple
  • Nvidia
  • Amazon
  • Broadcom
  • Meta Platforms
  • Alphabet (C shares)
  • Alphabet (A shares)
  • Costco
  • Tesla

Dow Jones

  • UnitedHealth
  • Goldman Sachs
  • Microsoft
  • Caterpillar
  • Home Depot
  • Amgen
  • Visa
  • Salesforce
  • McDonald’s
  • American Express

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Nasdaq vs Dow Jones: Which has more stocks?

The Nasdaq Composite is larger than the Dow Jones by a pretty substantial margin. The Dow Jones is only 30 stocks while the Nasdaq Composite is more than 2,500 stocks. The Nasdaq 100 also contains more stocks than the Dow, 70 more to be precise (the name kind of gives it away).

Nasdaq vs Dow Jones: Which is worth more?

The Nasdaq Composite’s market capitalisation is likely very close to the Nasdaq stock exchange’s market cap, which is around $23 trillion (around £19 trillion).

Meanwhile, the Dow Jones has a market capitalisation of around $12 trillion (about £9 trillion). When you consider that the Dow Jones is just 30 stocks and the Nasdaq Composite contains thousands, you get a sense of how large the stocks are in the Dow Jones.

Nasdaq vs Dow Jones: Which is more diversified?

The Dow Jones only gives you access to 30 big players on US exchanges while the Nasdaq Composite gets you access to a wider range of companies, including smaller stocks.

The Nasdaq Composite has a lot of technology stocks, with this sector taking up half of the index. It’s quite spread out across other sectors as well, but this is a key one. Technology is also the largest sector in the Dow Jones, with around 20% of holdings coming from the information technology sector.

Nasdaq vs Dow Jones chart

Platforms where you can invest in the Nasdaq Composite and the Dow Jones

These trading apps allow you to invest in companies within the indices directly or to invest in a fund or ETF that copies one of the indices.

Best for 0% commission stocks
eToro Free Stocks logo
Finder Award
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Capital at risk. Fees apply.
Copy picks from top traders
4.3 ★★★★★
Commission-free trades
Fractional shares
Get dividend payments
Best for fractional shares
XTB logo
Go to site
Capital at risk. T&Cs apply.
Earn 4.75% on uninvested funds
4.4 ★★★★★
Commission-free trades
Fractional shares
5,400+ stocks/ETFs
Best for US shares
CMC Invest share dealing account logo
Finder Award
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Capital at risk. T&Cs apply.
Try Plus free for 3 months
4.4 ★★★★★
Commission-free trades
3,000+ stocks
Real-time live pricing

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

Here are some of the best-performing Dow Jones and Nasdaq funds according to justETF:

Fund5-year performance (to Feb. ’24)Link to invest
Lyxor Dow Jones Industrial Average (DJEL)Lyxor icon68.82%Invest with IGCapital at risk
iShares Dow Jones industrial average (CIND)iShares icon68.67%Invest with eToroCapital at risk
Fund5-year performance (to Feb. ’24)Link to invest
Amundi NASDAQ 100 (ANXG)Amundi icon164.88%Invest with IGCapital at risk
Lyxor NASDAQ 100 ETF (NASL)SPDR icon163.76%Invest with IGCapital at risk
iShares NASDAQ 100 (CNX1)iShares icon161.79%Invest with eToroCapital at risk
Invesco NASDAQ 100 (EQSG)Invesco iconN/AInvest with IGCapital at risk
Xtrackers NASDAQ 100 (XNAQ)DWS Xtrackers iconN/AInvest with IGCapital at risk

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.


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 big stocks as well as smaller players in the market. The Dow Jones gets you access to large blue-chip companies from both the Nasdaq and NYSE exchanges.

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 all based in the US.

How to invest in the Dow Jones and Nasdaq

  1. Find a Dow Jones or Nasdaq ETF, index fund or mutual fund. Some index funds track the performance of all stocks on the index while others only track a certain number of stocks or are weighted more towards specific stocks. You should select the fund that best suits your investment goals.
  2. Open an account. To invest in the funds, you’ll need to open a trading account with a broker or platform. Keep in mind that some index funds may only be available on certain brokerages or platforms. The providers in our comparison table below let you invest in US shares. We’ve listed some index funds below that are listed on the London Stock Exchange (LSE).
  3. Deposit funds. You’ll need to deposit funds into your account to begin trading. Some brokers may charge you deposit fees or you may need to pay a forex fee for your pounds to be converted into US dollars.
  4. Buy the fund. Once your money has been deposited, you can then buy the index fund. You’ll generally pay a small ongoing annual fee to invest in an ETF or index fund.

Compare Dow Jones and Nasdaq trading platforms

Table: sorted by promoted deals first

These trading apps allow you to invest in individual stocks found on each index or use a fund like an ETF to invest in the whole index.

Name Product UKFST Finder Score Min. initial deposit Price per trade Frequent trader rate Platform fees Offer Link
Finder Award
FREE TRADES
eToro Free Stocks
4.3
★★★★★
$100
£0 on stocks
N/A
£0
Go to site

Capital at risk. Fees apply.

Platform details
XTB
4.4
★★★★★
£0
£0
£0
£0
Earn up to 4.75% interest on uninvested cash.
Go to site

Capital at risk

Platform details
InvestEngine
4.4
★★★★★
£100
£0
N/A
0% - 0.25%
Get a Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine. T&Cs apply.
Go to site

Capital at risk

Platform details
Hargreaves Lansdown Fund and Share Account
4.2
★★★★★
£1
£11.95
£5.95
£0 (0.45% for funds)
Go to site

Capital at risk

Platform details
OFFER
Freetrade
4.4
★★★★★
£1
£0
N/A
£0
Get a free share worth up to £100 when you sign up and deposit at least £50. T&Cs apply. Capital at risk.
Go to site

Capital at risk

Platform details
IG Share Dealing
4.1
★★★★★
£0
From £8
From £0
£8 per month
Get 0% commission on US shares. T&Cs apply. Capital at risk.
Go to site

Capital at risk

Platform details
Wealthify
4.2
★★★★★
£1
£0
N/A
0.6%
Go to site

Capital at risk

Platform details
interactive investor Trading Account
4.2
★★★★★
£0
£3.99 (free regular investing)
£0
From £4.99 a month
Pay no account fee for 6 months when you open an ii Trading Account. Offer ends 31 December. Capital at risk. Terms & trading fees apply. New customers only.
Go to site

Capital at risk

Platform details
SaxoInvestor Share Dealing Account
4.3
★★★★★
£0
£3
N/A
0.12% per year
Limited time offer: Zero commission on 100 US stocks for new customers. T&Cs apply.
Go to site

Capital at risk

Platform details
Moneyfarm
3.9
★★★★★
£1
£3.95
N/A
£0
Go to site

Capital at risk

Platform details
Charles Stanley share dealing account
3.6
★★★★★
£0
£11.50
N/A
0.35%
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct. T&Cs apply. Capital at risk.
Go to site

Capital at risk

Platform details
CMC Invest share dealing account
4.4
★★★★★
£0
£0
N/A
£0
Get your first 3 months free when you upgrade to Plus plan. T&Cs apply. Capital at risk.
Go to site

Capital at risk

Platform details
Trading212
4.7
★★★★★
£1
0%
£0
£0
Get free fractional shares worth up to £100 when you sign up with Finder’s link and use the code “FINDER”. T&Cs apply. Capital at risk.
Read review

Capital at risk

Platform details
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Bottom line

Nasdaq is a stock exchange in the US, known for having a high proportion of technology stocks. A popular Nasdaq index is the Nasdaq Composite, which comprises most of the stocks listed on the Nasdaq stock exchange. The Dow Jones is an index of 30 US stocks — typically large blue-chip companies. It’s a hand-picked index, while the Nasdaq Composite includes all eligible stocks.

Frequently asked questions

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.


Deputy editor

George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio

George's expertise
George has written 191 Finder guides across topics including:
  • Investing
  • Personal finance
  • Tax
  • Pensions
  • Mortgages

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