Is it true that in the US women fund managers are doing better than the male fund managers?

While there is no theoretical evidence of why it should be so, one thing is clear that globally in the US markets, the women fund managers have empirically done better. Clearly, women are doing a better job picking stocks than their male counterparts in the last one year.

According to a study done in the US, among the 500 large-cap US mutual funds, the funds with at least one-third women fund managers have beaten those funds with no women by over 100 basis points. This data was compiled in a study by Goldman Sachs group.

One thing that could explain this divergence is the sectoral leaning. For example, woman-managed funds lean more towards technology stocks while male managers often tend to lean more toward financial shares. Financials struggle as technology makes new highs.

Another way to look at these funds would be on risk adjusted basis. However, even if you consider returns post risk, female-managed funds have clearly outperformed their male counterparts by a margin even amid the pandemic-related swings in the stock markets.

One argument against this study is the size or representation effect. For example, women account for just about 3% of the mutual funds tracked. In fact, an all-female fund manager team would account for just about 2% of total assets under management. In contrast, 77% are by all-male teams, giving male managers the disadvantage of large numbers.