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There's been a lot of talk recently about technology's underperformance over the past few months. If you look at a comparison between the performance of the S&P 500 and the "tech heavy" Nasdaq 100, it is clear that the S&P 500 has been outperforming. Since the start of August, the S&P 500 has risen by close to 10%, while the Nasdaq 100 is up by just slightly more than half that amount (5.26%).

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Using the Nasdaq 100's performance as a proxy for technology may not be the most accurate gauge of how technology is doing, though. Because shares of Apple (NASDAQ:AAPL) account for about 20% of the Nasdaq 100, it is probably more accurate to call the index Apple-heavy instead of tech-heavy.

Taking a different approach, in the chart below we compared the performance of the Nasdaq 100 to the performance of each of the index's components on an equally-weighted basis. Here, each stock has the same weighting, so rather than having a 20% weighting in the index, AAPL is just like every other stock and only has a 1% weighting. Based on this approach, the Nasdaq 100's performance looks considerably better with a gain of 15.43%, compared to 5.26% for the Nasdaq 100 weighted index.

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Comparing the performance of the Nasdaq 100 equal-weighted index to the S&P 500 shows that technology (using Nasdaq 100 stocks as a proxy) is doing rather well.

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In order to make a true "apples to apples" comparison between the two indices, we should also look at the performance of the S&P 500 on an equally-weighted basis. In the chart below, we show the performance of the S&P 500 and compare it to the performance of the Nasdaq 100 and S&P 500 equal-weight indices. Here, it is interesting to note that going back to the start of August, both equal-weight indices have performed right in line with each other. With these charts in mind, the next time you hear someone moaning about how tech stocks are underperforming, it is probably safe to assume that they -- like the Nasdaq 100 -- have a portfolio full of Apple.

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Source: Is Tech Really Underperforming?