The in­cred­i­ble shrink­ing per­cent­age of fe­male fund man­agers in the United States

The Denver Post - - BUSINESS - By Stan Choe

Few women run mu­tual funds around the world, but they’re even more scarce in the United States than in other coun­tries, and their ranks have been shrink­ing in re­cent years.

Less than 10 per­cent of all U.S. fund man­agers are women, which means that some­one has a bet­ter chance of rolling a seven at the craps ta­ble than find­ing a fund run by a woman. A new re­port from Morn­ingstar shows that the per­cent­age has been on a slow de­cline since 2008, when 11.4 per­cent of U.S. fund man­agers were women. It also shows that other coun­tries have higher per­cent­ages of fe­male fund man­agers. Sin­ga­pore tops the list at 30 per­cent.

“I’ve worked in this in­dus­try for more than 15 years, and I knew there was an im­bal­ance,” said Laura Pavlenko Lutton, one of the study’s au­thors and the North Amer­ica prac­tice leader for Morn­ingstar’s man­ager re­search. “But I didn’t rec­og­nize how sig­nif­i­cant it was un­til we ac­tu­ally looked at the num­bers.”

Should the gen­der dis­par­ity mat­ter? Maybe it shouldn’t, as long as the best man­agers are find­ing their way into po­si­tions atop funds.

But re­search sug­gests that women tend to hold onto in­vest­ments longer, which can lead to bet­ter long-term re­turns. Fe­male pro­fes­sional in­vestors also are more likely than their male coun­ter­parts to de­fine suc­cess as meet­ing long-term goals, rather than beat­ing peers or in­dex bench­marks, ac­cord­ing to State Street’s Cen­ter for Ap­plied Re­search.

Where fe­male fund man­agers have been mak­ing strides is in ar­eas of the mar­ket that have seen some of the fastest growth. Women are more likely to man­age an in­dex fund, for ex­am­ple, than an ac­tively man­aged one that tries to beat the in­dex by pick­ing win­ners and avoid­ing losers.

Women are also more likely to be man­agers of funds with so­cially re­spon­si­ble in­vest­ment strate­gies though the gap has nar­rowed in re­cent years. And women have bet­ter odds of run­ning a fund as part of a man­age­ment team.

Given where women are most likely to be fund man­agers, Ann Miletti is close to an anom­aly. She’s the solo man­ager atop sev­eral ac­tively man­aged mu­tual funds, in­clud­ing the $1.7 bil­lion Wells Fargo Op­por­tu­nity fund.

She no­tices how few of her fel­low fund man­agers are women — she’s of­ten the only woman in the room. She at­tributes part of it to the small pool of fe­male can­di­dates look­ing to be­come fund man­agers.

When funds are look­ing to hire a man­ager, they tend to con­sider se­nior an­a­lysts, and rel­a­tively few are women. Go down a rung on the se­nior­ity lad­der, and the pic­ture is sim­i­lar. Even on univer­sity cam­puses, when Miletti is talk­ing with pro­fes­sors for cor­po­rate re­cruit­ing, she of­ten sees rel­a­tively few women look­ing to go into fi­nance.

Nev­er­the­less, Miletti said she’s hope­ful that the gen­der dis­par­ity will nar­row with time. “I am fairly op­ti­mistic be­cause there are peo­ple who are fo­cused on it to­day,” she said. “You didn’t see sto­ries 10 years ago about this. At­ten­tion and aware­ness tend to start to bring ac­tiv­ity.”

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