Monkeys make better trades than the average fund manager

A recent study by Cass Business School claims that monkeys make better trades than human beings. So much for the financial elite.

by Rebecca Burn-Callander
Last Updated: 09 Oct 2013

That's right. A monkey picking investments at random could beat funds tracking the US stock market, according to new research. 'Nearly every one of the 10 million monkey fund mangers beat the performance of the market cap weighted index,' says Professor Andrew Clare, co-author of the study.


Before you start picturing monkeys in three-piece suits hacking away at a computer terminal, it's worth noting that the primates used in the study by academics at Cass Business School were of the 'virtual' variety. To wit, they used a computer to simulate the stock-picking abilities of a monkey and pitted these random choices against a traditional market capitalisation weighted index. Unfortunately for fund managers, the results showed that our hairy genetic relatives won every time.

However, before fund managers across the Square Mile start throwing themselevs off the Gherkin, the research did also find that certain alternative indices – such as an index where stocks were weighted according to sales – befuddled the monkey magic. The traditional trading models trumped 99% of the monkeys’ randomly constructed ones.

Still, MT will never think of the phrase 'monkey business' in the same way again...

Find this article useful?

Get more great articles like this in your inbox every lunchtime

What they don't tell you about flexible working

The realities of ditching the nine to five don't always live up to the hype....

The business case for compassion: Nando's, Cisco and Innocent Drinks

Consciously, systematically humane cultures reap enormous benefits, argues academic Amy Bradley.

“I have great respect for the capital markets, but I don’t want their ...

Exclusive: PA Consulting CEO Alan Middleton on acquisition bids, growth strategy and life after private...

Dame Inga Beale: “I was told I didn’t deserve to be alive”

The former CEO of Lloyd's of London reveals the leadership lessons that shaped her career...

Read like a CEO: James Reed

The recruitment boss discusses the books that give him business ideas and management inspiration.

What British business can learn from the French

Forget the cliches - our old rival is hotbed of management innovation and is leading...