Female Fund Managers More Likely to Invest Sustainably

A recent Morningstar study shows women are more likely to manage passive funds than active funds and to manage fund-of-funds and socially responsible funds

Karen Wallace 22 December, 2016 | 1:19PM

 

Karen Wallace: I'm Karen Wallace for Morningstar. In a new study that looks at fund managers by gender, Morningstar found that women are underrepresented in fund manager roles worldwide. Here to discuss the study's findings is Madison Sargis. She is a quantitative analyst for Morningstar.

Madison, thanks so much for being here.

Madison Sargis: Thanks for having me.

Wallace: So, my first question is, what is the scope of the study? How many countries did you study, and what sorts of trends did you find?

Sargis: So, we looked at managers in over 56 different countries, and we found that at the global level women are still underrepresented. But in smaller markets, such as Hong Kong and Singapore, there's a higher representation of women fund managers.

Wallace: You've studied this data before and have you found that it's becoming more gender-inclusive or not?

Sargis: So, we looked at this data going back to 2008, and we found that, really, the rates of female fund managers has not increased through time, and it's been steady around 12%.

Wallace: You also mentioned in your report that you used a modeling exercise to determine if certain characteristics are more prevalent among women fund managers or funds run by men. And I think what you're trying to determine is if women are more likely to run a certain type of fund than a man would be. What did you find there?

Sargis: Yeah. So, we found that women are more likely to manage passive funds than active funds. They are also more likely to manage fund-of-funds and socially responsible funds.

Wallace: So, lastly, why should be an investor be interested in a study like this? I think a lot of investors would say, as long as my fund manager is delivering good results, his or her religion, race, gender doesn't matter to me. Why should an investor pay attention to something like this?

Sargis: Yeah. I think our study finds a couple of characteristics that may be associated with better investing practices. For example, we find that funds run by women generally have lower turnover ratios, which generally results in lower costs and better investing outcomes. And also, women are more likely to have their CFA in certain asset classes, which is a measure of, it's a credential for fund managers.

Wallace: OK. The study is live on Morningstar.com. Thank you so much for being here to discuss it, Madison.

Sargis: Thank you.

Wallace: For Morningstar, I'm Karen Wallace. Thanks for watching.

 

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About Author

Karen Wallace  Karen Wallace is an editor with Morningstar.

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