SS10: R27: page 283: q4: full replication and optimization

why a self-rebalancing portfolio is the one without need for trading activity? Thanks

You don’t have to trade except to re-invest dividends .If there is no external cash flow and the index stays fairly stable ( not too many changes in it ), the float-weighted index will match the float or capitalization weighted index perfectly . This is because as stocks grow or shrink , so will their weights in the index