We no longer check to see whether Telegraph. To see our content at its best we recommend upgrading if you wish to continue using IE or using another browser such as Firefox, Safari or Google Chrome. Ten million portfolios containing stocks randomly selected as if by monkeys managed to produce better profits than a tracker fund over 40 years, academic research has concluded. The tracker fund was made up of stocks weighted according to their share of the market, thus raising the question as to whether this is an appropriate strategy to build passive investment funds.

The majority of passive tracker funds are constructed this way.

A tracker aims to mirror or "track" the performance of any of a number of worldwide stock market indexes, such as the FTSE A FTSE tracker is proportionally invested into the companies in the index based on how large those companies are - their market capitalisation.

But the new research, conducted by Cass Business School and sponsored by Aon Hewitt, questions whether there is a better way to construct indices and the funds that track them. So an index could instead, researchers suggested, be based on the size of the dividends paid by the companies or on "book value", which is the value of a companies assets if it were wound up and sold.

Unlike market capitalisations, these measures are not inflated by market sentiment. Warning of 'severe rent arrears' rise. Reveal real investing costs, says funds chief.

How Well Do Blindfolded Monkeys Play the Stock Market?

How to save on Isa investing costs with an ETF. The study is based on monthly US share data from to and looked at 10 million indices weighted randomly.

These "monkey" funds consistently delivered much better returns to the weighted approach. John Belgrove, senior partner at Aon Hewitt, said: The good news for investors is that there is more implementation choice than ever to consider when selecting a preferred long term portfolio construction and fund manager style.

Passive funds have become increasingly popular over the last couple of years as investors get fed up for paying over the odds for failure. Passive investment can be done using a tracker unit trust or exchange-traded fund ETF.

Trackers can be bought and sold like any other unit trust or Oeic via a fund platform. ETFs are listed on the stock exchange like a share. Find out how to invest in recovery with this free guide. Help protect yourself from Identity Fraud with CreditExpert. The best way to transfer money overseas.

Howard Marks, an Oxford University graduate turned drug smuggler, made millions. Now he eagerly awaits royalty cheques.

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