Brokerage fees值的是什么？

问题如下：

Winthrop asks Tong about the techniques wealth managers and fund companies use to create index-tracking equity portfolios that minimize tracking error and costs. In response, Tong outlines two frequently used methods:

Method 2 When tracking an index with a large number of constituents and/or managing a relatively low level of assets, a relatively straightforward and technically unsophisticated method can be used to build a passive portfolio that requires fewer individual securities than the index and reduces brokerage commission costs.

Method 2’s portfolio construction process is most likely:

选项：

A.

optimization

B.

full replication

C.

stratified sampling

解释：

Stratified sampling methods are most frequently used when a portfolio manager is tracking an index that has a large number of constituents, or when managing a relatively low level of assets. Brokerage fees can become excessive when the number of constituents in the index is large.

A is incorrect because optimization does not involve simple techniques. Optimization requires a high level of technical sophistication, including familiarity with computerized optimization software or algorithms, and a good understanding of the output.

B is incorrect because full replication occurs when a manager holds all (not fewer) securities represented by the index in weightings that closely match actual index weightings. Full replication techniques require that the mandate’s asset size is sufficient and that the index constituents are available for trading. Full replication can create significant brokerage commissions when the index is large.