What Sets the NASDAQ Global Select Market Composite Apart?
The NASDAQ Global Select Market Composite is a prestigious, market capitalization-weighted index comprised of both U.S.-based and international stocks, representing the elite NASDAQ Global Select Market. As of August 2020, this exclusive index featured over 1,400 stocks that adhere to NASDAQ’s stringent financial, liquidity, and corporate governance standards.
Key Highlights
- Exclusive Market Index: Encompassing over 1,400 top-tier stocks that meet NASDAQ’s rigorous requirements.
- Three-Tiered System: Differentiates the NASDAQ into the Global Select Market, the Global Market, and the Capital Market.
- High Standards: Stocks must fulfill stringent financial and liquidity requirements to be part of this elite group.
- Tier-based Promotion and Demotion: Stocks can be promoted or demoted based on their market capitalization.
In-Depth Look at the NASDAQ Global Select Market Composite
Formed in July 2006, the NASDAQ Global Select Market Composite arose from the division of the Nasdaq National Market into the Global Market and Global Select Market. Though the division didn’t alter listing standards, it showcased the global scope of the index. The select index includes about a third of the largest companies listed on the NASDAQ.
Market Capitalization Matters
The segmentation of NASDAQ’s tiers relies heavily on the company’s market capitalization. The Global Select Market represents the
Related Terms: market capitalization, NASDAQ Global Market, NASDAQ Capital Market, IPO, stock listing.
References
- Nasdaq Global Indexes. “NASDAQ Global Select Market Composite (NQGS)”.
- Nasdaq. “Initial Listing Guide”, pages 4, 6-10.
- Nasdaq. “NASDAQ Names Companies to The NASDAQ Global Select Market”, page 1.
Get ready to put your knowledge to the test with this intriguing quiz!
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## What does the Nasdaq Global Select Market Composite represent?
- [x] A stock market index that includes global companies
- [ ] A bond market index for U.S. securities
- [ ] A commodities market index
- [ ] A list of venture capital firms
## Which exchange operates the Nasdaq Global Select Market Composite?
- [ ] New York Stock Exchange (NYSE)
- [x] Nasdaq Stock Market
- [ ] London Stock Exchange (LSE)
- [ ] Tokyo Stock Exchange (TSE)
## What is a key requirement for a company to be listed on the Nasdaq Global Select Market Composite?
- [ ] Local market presence
- [x] Stringent financial and liquidity standards
- [ ] Administrative headquarters in the U.S.
- [ ] Engagement in commodity trading
## How often is the Nasdaq Global Select Market Composite updated?
- [ ] Annually
- [ ] Quarterly
- [x] Daily
- [ ] Weekly
## Which of the following sectors is NOT commonly found in the Nasdaq Global Select Market Composite?
- [ ] Technology
- [ ] Healthcare
- [ ] Consumer Services
- [x] Local Government
## In what way do the companies in the Nasdaq Global Select Market Composite differentiate from those in other Nasdaq listings?
- [ ] All are startups
- [ ] All are from North America
- [x] Adherence to the highest initial and continuous listing standards
- [ ] All are in the financial sector
## What distinguishes the Nasdaq Global Select Market Composite from the Nasdaq Global Market?
- [ ] Focus on small-cap companies
- [ ] Companies listed must conduct their business globally
- [x] Higher initial listing standards and market cap
- [ ] Only includes technology companies
## Which type of investors might be most interested in the Nasdaq Global Select Market Composite?
- [ ] Bondholders
- [ ] Real estate investors
- [x] Equity investors seeking high-growth companies
- [ ] Currency traders
## How does the performance of the Nasdaq Global Select Market Composite generally compare to broader market indices?
- [ ] It’s based on average metrics
- [x] Often more volatile due to higher-growth stocks
- [ ] It usually underperforms
- [ ] It mirrors exactly the performance of the S&P 500
## Why might a company aim to get listed on the Nasdaq Global Select Market Composite?
- [ ] To remain privately held
- [x] To benefit from increased visibility and credibility
- [ ] To reduce investor scrutiny
- [ ] To avoid regulatory requirements
