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Less Than 2% Of AUM Is Managed Exclusively By Women

A June 2015 Morningstar Research Report highlights that women are sorely underrepresented in the mutual fund management business. It is well known that the financial industry is in general dominated by males, but apparently the mutual fund industry is one of the strongest bastions of male domination.

The Morningstar report notes that less than 10% of all U.S. fund managers are women. Moreover, women only exclusively run around 2% of the mutual fund industry’s assets and open-end funds.

AUM – Details on Morningstar fund manager gender survey

More than 7,700 individuals work as portfolio managers of U.S. open-end mutual funds as of March 31, 2015. This includes both managers who run mutual funds exclusively and those who as part of a team. Among these managers, a mere 9.4% are women. In specific, women exclusively manage 184 funds, representing close to 2% of the industry’s funds and assets. More over, the probability that a woman is managing a core multi-asset allocation fund is yet smaller.

Mutual Funds

The largest fund companies do have a better record in terms of gender diversity than the industry as a whole. Dodge & Cox is the most gender diverse, employing 25% women managers. Franklin Templeton has 14.7% female fund managers, then JPMorgan at 13.6%. Of note, Vanguard, Fidelity, and T. Rowe Price are at or below the industry average, and Lord Abbett comes in at the bottom among larger firms, with a single woman manager.

Mutual Funds

Not surprisingly, women are more likely to be managing a fund as a member of a male-female team than managing a fund by themselves or as part of a team of women. Funds that have managers of both genders represent 21% of the industry and close to 35% of the sector’s allocation funds.

AUM – Male- and female-manager mutual funds perform equally well

Mutual Funds

The performance of funds run exclusively by women is quite close to that of funds run by men. Of note, only 37 females have continuously run a mutual fund for more than 10 years, and in most cases the women co-managed with men for at least a span of the decade. The returns are quite similar to men’s, even though women tend to be focused on specialized funds in niche sectors.

The average 10-year category rank for equity funds run by women and men are the same, although the average annual expense ratio for women-run funds was seven basis points higher. Women-run fixed-income funds slightly underperformed those managed by men, but that relates to one team of women running several  municipal-bond funds that underperformed over the past decade. Also of interest, the handful of women running their own allocation and alternatives funds did equally well in spite of higher costs among allocation funds (15 basis points higher) and alternative funds (49 basis points higher).