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