While gender diversity in the workplace may be good for society, it may not affect investment returns, according to a new report.
“Fund Managers by Gender: Through the Performance Lens,” a report released last week by Morningstar, suggests that the gender makeup of a fund’s management makes no difference.
Comparing the performance of male and female fund managers from 2003 through 2017, Morningstar found that male-managed active equity funds outperformed their category, while all-female bond funds tended to offer better performance than the category average. Across all equity and fixed-income portfolios, the difference between the sexes in annual performance was in the hundredths of a percent.
The study looked at more than 11,000 funds, but only a fraction of those lasted for 10 years or more: 3,230 funds managed by men only, 104 funds managed by women only; and 1,012 managed by both men and women.
The study found that teamwork might be more important than diversity: Funds managed by teams of men or teams of women tended to outperform solo male managers in both equities and fixed income.
Prior Morningstar research has found that women account for less than 10 percent of the fund management industry and manage only 2 percent of the industry’s assets, at a time when the industry is struggling to diversify.
Among all funds during Morningstar’s study period, the average women-only led mutual fund slightly trailed its category average over 10 years, while the average men-only and gender-diverse mutual funds slightly outperformed their category averages.
In its most recent study, Morningstar also found that the number of women fund managers has declined since 1990. Women are also less likely to manage active funds and are more likely to oversee index funds or funds of funds, according to Morningstar.
More recent research by the John S. and James L. Knight Foundation found that firms owned by minorities and women accounted for just one percent of the $67.1 trillion in assets managed by hedge funds, mutual funds, real estate funds and private equity funds. According to the CFA Institute, only 16 percent of its charterholders are women.
Morningstar highlights fund familes like Dodge & Cox and Franklin Templeton as outpacing the industry’s averages on gender diverse management. Vanguard, Fidelity and T. Rowe Price each came in below average.