Gender equality and investing

A perspective from E*TRADE Securities 03/08/19

With International Women’s Day upon us, it’s a good time to dig into a topic many investors may not think about: gender equality in investment management.

Consider, for example, that only 10% of mutual fund managers are women—well below the percentage of women in other historically male-dominated positions, such as Chartered Financial Analysts® (18% ),1 practicing physicians (33%),2 and lawyers (38%).3 And with men capturing 85–90% of new portfolio-manager roles since 1990, the challenge to fill these positions with women has been ongoing.4

Morningstar conducted a study to see if a possible explanation for this low percentage was performance: Do female fund managers deliver worse returns? However, their research indicates there is no significant difference between male and female fund-manager performance.4 Breaking things down, the analysis found that from 2003 to 2018, fixed-income funds run exclusively by women had a cumulative return that was 4.23% (0.32% annualized) higher than the average for the category.

One study showed that funds managed by mixed-gender teams outperformed both male-only and female-only managed funds in 2018.

And when you look at funds run by a team of both men and women, things get even more interesting. An analysis by London-based financial information firm CityWire showed that funds managed by mixed-gender teams outperformed both male-only and female-only managed funds in 2018.5

Also, Citywire’s study suggests the US is lagging other countries in terms of its proportion of women-only and mixed-gender funds. Spain has the greatest percentage of solo female managers and female-only teams (15%), while the US figure is only 1%. Globally, Hong Kong has the highest percentage (43%) of assets managed by mixed-gender teams.

In recent years I’ve found that more young women—in college and entering the workforce—are interested in pursuing portfolio management.

As a woman in investment management for the past decade at various firms, Claire Keefe, Investment Strategy Manager at E*TRADE Capital Management, says she has experienced the challenges of being a woman in a male-dominated industry, but she also sees some promising signs for the future.

“In an ideal world, the gender of a portfolio manager would be a non-issue, but bias is still an issue in the industry overall,” she says. “However, in recent years I’ve found that more young women—in college and entering the workforce—are interested in pursuing portfolio management and investment research. Hopefully, a growing number will enter the field.”

As an investment strategy manager, Keefe is part of a mixed-gender team helping to choose the investments that go into E*TRADE Personalized Investments portfolios and determining which mutual funds and ETFs make it onto the firm’s All-Star lists (curated lists for E*TRADE customers of the firm’s no-load mutual funds and ETFs).

She notes that between the All-Star lists and the various holdings in E*TRADE Personalized Investment portfolios, there are several funds where women are either the sole portfolio manager or play very prominent roles.

As the industry continues to evolve, the goal for investors will remain the same—to find investment opportunities that can help them achieve their financial goals. And ultimately, the evidence suggests that funds run by women are just as successful as those operated by men and that, depending on the type of investment, woman-run or mixed-gender funds can even provide an edge.

Investor takeaways

●Do your research: It may take some digging, but if a fund (or type of fund) interests you, look beyond the numbers to find out about the human beings managing them. If it’s not run by a woman, are there women on the team?

●There’s more than one road to gender diversity: In addition to mutual funds run by women, there are also ETFs that invest in companies known for having women in prominent management positions and on their boards of directors.

●Always follow the money: You should never make an investment decision based exclusively on a portfolio manager’s gender, so it’s usually a good idea to check out a fund’s track record. Though past performance is never indicative of future results, it can be a key factor in determining the skill level of the fund managers. If that looks good, move on to gender diversity.


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1. R. Adams, B. Barber, and T. Odean, “Family, values, and Women in Finance,” September 2016,

2. “Professionally Active Physicians by Gender,” Henry Kaiser Family Foundation, October 2018,

3. Jennifer Cheeseman Day, “Number of Women Lawyers At Record High But Men Still Highest Earners,” United States Census Bureau, May 8, 2018,

4. Madison Sargis and Kathryn Wing, “Fund Managers by Gender—Through the Performance Lens,” Morningstar, March 8, 2018,

5. CityWire, Alpha Female 2018,

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