Nasdaq 100 Plans to Reduce Tech Weighting

After sliding 35.5% so far this year, the Nasdaq 100 index is headed for a major make-over.

The index, which comprises the Nasdaq Stock Market’s 100 largest nonfinancial stocks, will have its weighting in technology stocks reduced to 65% from 78%, Nasdaq Chairman Hardwick Simmons said Thursday. The official shift is scheduled to be announced Dec. 17 and to take effect Dec. 24.

The Nasdaq 100, dominated by such giants as Microsoft, Intel and Cisco Systems, is used as a proxy for tech stocks by many small investors and portfolio managers.

Nasdaq will cut the representation of tech shares in the index during its annual re-balancing because of the sharp declines in the sector since March 2000, Simmons said. “We’ll see if people want to use it as a proxy for technology going forward,” he said.

The index is the basis of the popular exchange-traded fund that goes by the ticker symbol QQQ .