Studies often show that women are better investors than men. But very few women actually oversee professionally invested assets.
New research by London-based financial planning firm Tilney Bestinvest found a “gross under representation of women in the fund management industry” in the UK. Meanwhile, in the US, a report from research firm Morningstar this week lamented the “exceedingly small” ranks of female money managers.
How small? According to Morningstar, only 9% of mutual fund managers in the US are women, a share that hasn’t budged much over the past five years. What’s more, while 24% of mutual fund assets are managed by teams composed of both men and women, fewer than 2% of assets are overseen exclusively by women, leaving 74% of assets exclusively managed by men.
Gender diversity is even harder to find in the UK—only 7% of retail investment funds are now managed or co-managed by women, around a third of the share in the US, according to Tilney Bestinvest.
These numbers are out of line with other industries. At FTSE 100 companies in Britain, women account for nearly a quarter of board positions. About the same share of federal judges and law- and accounting-firm partners in the US are female.
So why, on both sides of the Atlantic, are women so hard to find in the money-management industry? It’s not for performance reasons: Morningstar found no meaningful difference between the returns of funds managed by men and women. German researchers from the University of Mannheim have come to a similar conclusion, but found that investors showed a bias toward putting their money in male-managed funds, a possible explanation for funds’ reluctance to promote female managers (and a bad strategy on the part of the investors).
For its part, Morningstar says that the highest returns tend to come from mixed-gender teams. A better balance is what Helena Morrissey, who runs British fund firm Newton Investment Management, is after, as she explains in a statement:
Cognitive diversity is such an important aspect of building great teams—including teams of investors. Gender diversity is a key place to start building those broader perspectives since men and women do think and behave differently—we complement each other. It’s time to redouble our efforts to do something about this.