Bloomberg News, Times Staff

Striking while the index is hot, Nasdaq Stock Market Inc. is creating a new security that will let people invest in its 100 biggest nonfinancial stocks.

The second-largest U.S. stock market filed this week with the Securities and Exchange Commission to sell shares in a unit investment trust called Nasdaq Gold. Each share will track the performance of the Nasdaq 100, an index that has tripled in the last five years, outperforming the better-known Standard & Poor's 500, a barometer of blue-chip stocks.

But the Nasdaq 100 is down 16.7% from its recent peak, and many of its leaders sport lofty valuations. Microsoft Corp., for example, which accounts for 24.7% of the capitalization-weighted index, carries a price-to-earnings ratio of about 55.

By purchasing Nasdaq Gold, investors will simultaneously get stakes in the largest and most actively traded Nasdaq companies, including Intel, Dell Computer and Tele-Communications Inc. The shares would essentially represent a bet on a portfolio of technologies ranging from computers and telecommunications to the Internet.

"We are responding to investor demand," said John Jacobs, Nasdaq's vice president of investor services.

By letting investors put money on the direction of a stock index, the Nasdaq security will join a similar investment sold on the American Stock Exchange, which created Standard & Poor's depositary receipts known as SPDRs--or "Spiders"--that track the S&P; 500.

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