Download CRED
the market needs more women fund managers

the market needs more women fund managers

despite outperforming men, the number of women fund managers has hardly grown in the last twenty years. 
January 30, 2022
4 min read
share facebookshare twittershare linkedinshare whatsapp

The Market Needs More Women Fund Managers

share facebookshare twittershare linkedin

when we talk about legendary investors and fund managers the names that come to mind usually are Warren Buffett, George Soros, Bill Ackman, etc. all of whom are men.

so are women not doing well as fund managers?

on the contrary, recent data suggests that funds managed by women have outperformed the ones managed by men.

in 2020, after the pandemic induced sell-off in the global market, it was observed women managed funds fell less in comparison to the broader market. women-led hedge funds lost 3.5% in the first four months of 2020, as per Chicago-based data group HFR’s Women Access index. in comparison, the HFRI 500 Fund Weighted index, a broader measure of performance that incorporates both men and women-run funds, saw a steeper fall of 5.5%.

it’s no secret that the financial market has been dominated by men over the decades and the glass ceiling has been so high that women usually don’t end up in leadership positions and work mostly in sales, marketing, and operations positions at hedge funds.

bring down the glass ceiling

according to Morningstar, women make up only 14% of the 25,000 portfolio managers globally as of December 31, 2021. this proportion hasn’t changed since 2000.

another analysis from Morningstar on the Indian mutual fund industry shows the number of female fund managers remains dismal. the number rose by just two in 2020, against 22 in the case of men.

the analysis further noted that of the total open-ended assets managed by women fund managers, 80% of the AUM outperformed the peer group average on a one-year basis, 80% of the AUM outperformed on a three-year basis and 74% of the AUM outperformed on a five-year basis.

 in India, women such as Radhika Gupta, MD, and CEO of Edelweiss Mutual Fund, and Lakshmi Iyer, CIO-debt and product head at Kotak Mutual Fund have taken their respective firms to new heights.

 like in investing, diversification across the floor of fund houses helps to bring in fresh perspectives and unconventional ways to manage risk.

 data from further research suggests that women fund managers have been able to limit downside corrections better than their male counterparts during times of crisis and have even generated better returns when things recovered.

 a study by Hedge Fund Research noted that women hedge fund managers delivered nearly double the performance of men from January 2000 through May 2009. the same study found female-managed funds held up much better in 2008, falling 9.6% compared with 19% for male-run funds.

so, perhaps, it’s time more women fund managers are given their due. for the sake of the market, of course.