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To: MichaelW who wrote (85362)12/15/1998 8:54:00 AM
From: BGR  Read Replies (1) | Respond to of 176387
 
Thread,

Don't know if this has already been posted. The annual reorganization of the NDX100 brings two important changes this year which could have implications for the largest caps like MSFT, INTC, DELL, CSCO and WCOM wrt flow of index fund money.

... Nasdaq® will review the composition of the Nasdaq-100 Index on a quarterly basis, beginning in December 1998, and will adjust the weightings of Index components using a proprietary algorithm whenever: (1) Any individual component securities represents more than 24 percent of the total market value of the Index; and/or (2) The combined weight of all securities having individual weightings of at least 4.5 percent exceeds 48 percent of the total market value of the Index. Once the Index has been initially adjusted, it will be subsequently readjusted only if the Index weights exceed the 24 percent and/or 48 percent thresholds.

The precise post-diversification weightings of component securities in the Index will be determined based upon closing prices on December 10. The aggregate weight of the five largest stocks in the Index, approximately 61 percent, will be scaled down to 40 percent. Weightings of all Index securities will be reset by reducing or enlarging such weights toward 1.0 percent, the average weight. ...


nasdaq.com