Appropriate Benchmark EOC

Equity Port Management - EOC Q19

We are given an investor that has the following constraint: ‘Sunstantial cash inflows and outflows’

The answer suggests that an appropriate benchmark should favour ‘Investability over breadth’

Answer says: Due to cashflow situation a client needs greater liquidity (fine) and would not want an index with a large number of stocks (??)

Can someone explain the second part - why?

Might have a better idea - is this simply saying that the larger the index the more small companies in the index and therefore these firms have less liquidity?

So an investor that needs liquidity would prefer indexes with a smaller number of constituents (presumably larger firms)

Agree with rex. The problem stated the following " … he wants to avoid benchmarks biased toward small-capitalization stocks" and that fits with the explanation.