She’s just not that into you? Women in funds management in the U.S.

Morningstar’s recent research into United States fund managers shows that women are a rare find in these roles, with less than 10 per cent of all U.S. fund managers women.

Women run about two per cent of industry assets and open-end funds, while men run 74 per cent of industry assets, and 78 per cent of funds. Mixed gender teams make up the balance.

Performance of men-only and women-only investment teams are on par with one another as would be expected, since gender is not an indicator of investment skill, despite the overabundance of men in the industry.

In the U.S., the number of women entering other money-related industries are growing (accounting, financial advice) but women in funds’ management remain a scarcity.

The Fund Managers by Gender June 2015 research report discovered that the likelihood of a woman managing a core multi-asset allocation fund was even smaller than an open-end mutual fund. Women exclusively manage 184 funds, which covers just two per cent of the $12.6 trillion U.S. open-end mutual fund industry. In real terms, this equates to 699 women and 6,711 men managing funds in the U.S. While funds managed by teams that include men and women (equally in management roles) sit just under 20 per cent, the number of any funds being partially or fully managed by women remains incredibly low.

Gender has become a sore point in the same way that racial discrimination was a few years ago – the 'token woman' on the team appeared to support - or give the illusion of supporting - the entrance of women into higher paid, higher responsibility jobs. There is still a massive lag in the finance industry both in professional and leadership roles filled by women, but most industries still have a way to go in closing the gender pay and position gap regardless. Evidence is mounting that points to having women being good for business, and investment management is no different.

While women were more likely to manage pricey funds in niche areas, the report states, returns were about the same for male and female-run funds, and mixed teams provided the best results even though the performance difference of all three groups – men-only, women-only, and mixed – was slim. 

The study authors are blaming, at least in part, a ‘leaky talent pipeline’, with education at business schools appearing less interesting for women – 37 per cent of MBAs are achieved by women, with fewer still specialising in finance. Less than 17 per cent of all financial analysts in the United States are women, which is less than other countries with large financial centres: Australia has 18 per cent, the United Kingdom has 19 per cent, and Hong Kong and Singapore sit at 27 and 30 per cent respectively. The female talent pool in finance both here and in the States resembles a small goldfish pond compared to the swimming pools of Singapore and Hong Kong.

Where women choose to spend their time and energy is changing, with gender diversity in business and finance gently improving day by day. This study offers a snapshot into the US, which while not representing the Australian market directly, can offer insights into comparable behaviours.