Why Does Nvidia Make Up a Smaller Share of the Dow Jones Than the S&P 500 or Nasdaq-100?

At the time of this writing, Nvidia (NASDAQ: NVDA) is up by 186.6% year to date, pole-vaulting its market capitalization above those of Apple and Microsoft to make it the most valuable company in the world (again). But Friday's 3.2% sell-off in Nvidia left Apple within a whisker of claiming the No. 1 spot back.For now, though, Nvidia remains the largest component of the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq-100, which is comprised of the 100 largest non-financial companies in the Nasdaq Composite. Nvidia was added to the Dow Jones Industrial Average (DJINDICES: ^DJI) earlier this month. Yet in terms of its weighting in the Dow, it's ranked 21 of the 30 components, at just 2.1% of the index.The reason why Nvidia accounts for such a small piece of the Dow's calculation compared to its impact on the S&P 500 and Nasdaq-100 actually highlights an important distinction in the way those indexes operate. And it's something you should know about before you invest in top index funds or exchange-traded funds (ETFs).Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool