This just goes to show that constructing a real portfolio and a hypothetical portfolio are very different things, especially when dealing with
very illiquid securities like I do.
Pretty limited investment set in general, but especially so today with only a couple
very illiquid securities I am trying to buy.
There are various reasons why an ETF might not be able to replicate an index perfectly, for example it might be too costly to correctly replicate
very illiquid securities that are part of an index.
Not exact matches
Specifically, a sudden expansion of financial liquidity in the world's leading banking centers — whether an increase in British gold reserves in the 1820s or the massive transformation in the 1980s of
illiquid mortgage loans into
very liquid mortgage
securities, or some other structural change in the financial markets — has been the catalyst behind every period of globalization.
In the quest to compensate for low fixed income returns, pension funds have plowed money into stocks, private equity funds and
illiquid and
very risky investments, like subprime auto loan
securities and commercial real estate.