Your pension fund decides to invest in many national stock markets in a passive way. The objective is to try to match the performance of the local market capitalization-weighted index in each country. You do not buy national index funds but invest directly in companies listed on each market. Because of the limited size of your portfolios, you can buy only a few issues in each market. In which national markets are you likely to track the index well or poorly?

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The Answer of Your pension fund decides to invest in many national stock markets in a passive way. The objective is to try to match the performance of the local market capitalization-weighted index in each country. You do not buy national index funds but invest directly in companies listed on each market. Because of the limited size of your portfolios, you can buy only a few issues in each market. In which national markets are you likely to track the index well or poorly?

Your Pension Fund Decides to Invest in Many National Stock