Women are more successful at managing alternative investment funds, according to a study from accounting firm Rothstein Kass & Co. From 2007 to 2012, an index of women-owned alternative investment funds outperformed the HFRX Global Hedge Fund Index with annual returns averaging 3.6% compared to 3%, reports Joanne Cleaver for US News.
Female investors are more deliberate and risk averse
It seems that female fund managers take longer to make investment decisions, but they also take more factors into account and are more willing to hold on to their investments in the long-term. The result is less risky investment with fewer big wins, but consistently higher returns overall. The findings are in line with previous studies that show female investors are more deliberate and risk averse, and that female board members have a “steadying force on boards and in management,” as Cleaver puts it.
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The economy remains in distress, although there are signs of recovery underway. John Buckingham of Kovitz, editor of The Prudent Speculator newsletter, has found that value stocks typically outperform coming out of economic downturns. Thus, he argues that this is an excellent time to be a value investor. Q4 2020 hedge fund letters, conferences and Read More
“Women take lower risks because they do more research and are more comfortable holding their securities longer,” says KPMG LLP partner Camille Asaro. “It goes to the investment style of a good manger, male or female […] It’s not necessarily a gender thing. You always have to make sure that the manager is right for your strategy.”
Hedge funds owned by women are good
As a topic, gender differences can be something of a minefield, and sometime it’s hard to separate research findings from cultural baggage. As with any other edge that people can find, simply putting all of your money into a fund because it’s run by a woman or has women on the board isn’t a great idea, but there’s now a fair amount of research showing that gender equity is good for your portfolio.
Female fund managers are still a small minority (around 3%), and not everyone wants to put their money in hedge funds anyway, but you can increase your exposure to female decision makers by looking for companies that have female board members and strong policies that promote gender equality in the workplace. There are also indexes available that specifically track companies that are actively placing women on their boards and in senior management positions, and following them could be one of those happy instances where socially responsible investing actually beats the market.