Replication Methods in Passive Equity Investing

As a portfolio manager at wealth management firm Alpha Investments, you are tasked with developing a passive equity investment strategy for a client interested in gaining exposure to the S&P 500 Index. The client is particularly focused on minimizing tracking error while also ensuring sufficient liquidity. In your analysis, discuss the various replication methods available for achieving this goal, including both complete and sampling replication techniques. Additionally, outline the advantages and disadvantages of each method and provide a recommendation for which method you believe would be most suitable for the client's investment objectives.