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Commentary

The Percentage of U.S. Female Fund Managers Is Exactly Where It Was in 2000

Where the industry has and hasn’t made progress on gender representation.

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ARK Innovation ETF (ARKK) has sent shock waves through the fund industry, returning 152.5% and receiving inflows of $9.6 billion in 2020 alone (2021 has not been as kind thus far, but that is another story). The strategy aims to find undervalued plays and targets stocks that will benefit from disruptive innovation, an area traditionally difficult to value. ARK CEO and CIO Catherine Wood brings over 40 years of industry experience to the table but is still in the vast minority of fund managers--a woman.

Wood and her firm appear twice on the list of the 10 largest female-run funds by total net assets, which is shown below. Also appearing multiple times is Gemma Wright-Casparius, who manages Vanguard Intermediate-Term Treasury (VFITX), a top performer in the intermediate government category.

Despite the success and rising profiles of female fund managers, only 179 out of roughly 10,000 U.S.-domiciled active and passive funds (across equity, fixed-income, and allocation) were run by all-female portfolio-management teams as of Dec. 31, 2020. This accounts for less than 2% of teams and 1% of industry assets. By comparison, 70% of funds are run by all-male teams, accounting for 60% of assets under management.

While all-female funds remain a rarity in the industry, women’s representation has grown through mixed-gender teams, which made up 28% of funds and accounted for nearly 40% of AUM in 2020. Indeed, single-gender management teams--both male and female--have declined as a share of fund managers over the past 20 years, with gender-diverse teams becoming more commonplace.

Every year, Morningstar conducts an analysis of global fund managers by gender. We use data provided by companies (including prospectus documents and public filings) as well as software to assign the probability that a portfolio manager is male or female based on name recognition. Our global universe includes data on about 25,000 fund managers from equity, fixed-income, and allocation strategies (open-end and exchange-traded funds).

Not Much Has Changed for Female Fund Managers in the United States

As noted above, female-only fund management teams make up just 2% of all equity, fixed income, and allocation funds in the United States. This is down from about 6% in 2001.

In the U.S., about 11% of fund managers are female, a percentage that has remained constant over the past 10 years. While the number of fund managers has increased over that same time period, the proportion of female to male managers has remained constant. This is lower than the 14% of global fund managers who are female, largely unchanged from 20 years ago.

In addition to a unique count of managers, we also totaled the overall number of funds managed by gender. For example, say a female fund manager manages (or comanages) three funds: two index funds and one actively managed fund. In this case, the count would be two passive funds and one active fund managed by women. This is different from counting distinct fund managers, which would result in the same scenario being counted as one passive fund manager and one active fund manager. The two different ways of looking at this data show the trend in actual number of managers versus all the funds managed by each gender. For future analysis, it would be even more interesting to analyze the overlap between the number of managers and how many funds that they manage.

Below, we break out funds managed by active or passive. We see that female representation in the active space has been remarkably steady on a global scale over the past two decades. There has been more volatility in the passive space, but the overall story remains one of limited change.

We also broke down funds by asset class, which showed that, globally, female managers are most represented in the allocation space, accounting for about 14% of total funds. Female fund managers in equity are not far behind. As shown below, this is a notable departure from 20 years ago, when female managers were more prevalent in fixed-income strategies. In the U.S., female managers are most heavily represented in equity strategies--specifically sector- and ex-U.S. equity categories, where they make up more than 15% of all fund managers.


 

Stronger Representation of Female Fund Managers in Certain Countries

There is also considerable differentiation among countries and regions. Female managers are more represented in smaller fund markets like China (where they account for 28% of total managers, the highest share among major economies), Spain, and France. In larger fund markets like the U.S., Canada, and United Kingdom, female representation is below the global average. Additionally, as shown below, a few regions have seen a small uptick in female talent in the past five years, including the U.S. However, the U.K., Canada, and Spain have headed in the opposite direction.

Small Steps Forward for the Number of Women in Finance

Although the representation of female-run funds over the past decade has been relatively consistent, it is encouraging to see the industry make strides to highlight the issue and increase the number of gender-diverse managed funds. At Morningstar, we will continue to highlight trends in the fund manager industry to spark conversation and dialogue, especially as it relates to matters of diversity.

Note: We continue to revise our fund manager gender data and methodology in order to best represent changes in the industry. As such, historical figures presented in the charts and tables of this report may change over time as we refine the process. If you have any questions about the data or methodology, please contact the author.

Amrutha Alladi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.