More funds run by 'Daves' than women

Female fund managers are still greatly outnumbered by their male counterparts across Europe, analysis of Morningstar Direct data shows.

We have looked at how many funds are run by women across the UK, Italy, Spain and France to find that females are in the minority in all markets.

Is Australia doing any better? No, unfortunately.

In the UK, there are still more funds run by men called Dave than there are female managers in total. Some 68 funds are run by men called Dave or David, but there is only a total of 45 female managers in the UK.

Ruli Viljoen, head of manager selection at Morningstar, says: “If 2020 is remembered as the year of a global pandemic, it might also be remembered as the year in which the rights of minority groups were brought to the fore. Gender equality is by no means a new topic and over the years we have seen many initiatives to level the playing field. But as a group, women remain woefully underrepresented in the field of fund management.”

The 45 female fund managers in our UK analysis run a total of 95 funds between them, equivalent to just 7.7 per cent of UK-domiciled funds in our sample – meanwhile, Daves run 5.5 per cent of UK funds. The total assets of the UK funds we analysed was £475 billion ($855 billion), , and women managed just £44 billion of this, around 9.3 per cent of the total. By comparison, men named Dave manage £27.6 billion of investor cash in the UK.

Our analysis a year ago found that just 7.2 per cent of UK-domiciled funds had a female manager at the helm, so while there has been some improvement over the past 12 months, women remain firmly in the minority in fund management.

We looked at the oldest share class and accumulation units only of UK-domiciled funds, excluding index funds. Discounting funds where the manager’s name was not disclosed in Morningstar Direct, the sample encapsulated 1,226 funds.

Europe wide

The exercise was repeated across Italy, Spain and France to see which market had the most females running investor money. In these markets, we analysed European-domiciled funds available, screening for those available for sale in each country. And while Dave is not as common a name on the continent, the same pattern persists.

In Italy, there were 646 funds in our sample, with total assets of £121 billion. And while there are 39 funds run by men called Andrea, there are just 23 female managers in total. These women manage 81 funds between them, equivalent to 12.8 per cent of the funds in our sample, with assets totalling just under £13 billion, some 10.7 per cent  of total assets.

In Spain the number of female fund managers was significantly higher. Some 248 of the 1,187 funds in our sample had a female at the helm – equivalent to 20.9 per cent. There were 72 individual female managers within this, running £59 billion of a total of £223 billion of assets under management. The figures make Spain the most female-friendly country for fund managers within our cohort. The most common names among male managers in the country are Jose and Antonio, with 46 mandates run by each group. However, there are 72 funds run by women named Maria, the most frequently occurring name in our Spanish sample. Still, Marias only manage £11.9 billion of assets between them, compared to £18.9 billion for Joses.

Finally, we looked at France, which had the largest sample at 1,942 funds. Of these, some 352 had a female manager, equivalent to 18.1 per cent of funds in the group. There were 150 individual female managers within this group, managing a total of £19 billion between them. Women run 18.1 per cent of funds in our French sample and 17.7 per cent of assets under management.

Europe is not an isolated case. A global study of over 26,000 fund managers across 56 countries, conducted by Morningstar in 2015, revealed that women have not made sizeable gains in managing the world's mutual (or managed) funds. Researchers also found the rate of women fund managers is lower than the rate of women in other professions with similar education requirements, such as doctors and lawyers. Globally, about one in five fund managers is a woman.

No one knows

Is Australia doing any better? No, unfortunately. Research conducted last year shows that of the 540 people identified as "portfolio managers" in Morningstar's database (Australian-domiciled funds under coverage), 46 were women - or less than 10 per cent - under this title, overseeing investors’ capital in a lead or co-lead capacity. That number falls to 15 if you manually exclude women who are overseeing Australian-domiciled funds – those that regulated and taxed here – but work offshore, and those who are not identified as holding a lead or co-lead role within the fund.

In the Australian equity category, women feature as onshore lead or co-lead portfolio managers in funds from Tribeca Investment Partners, Fidelity International, Airlie Funds Management, Acadian Asset Management, Realindex Investments and Colonial First State.

On the fixed income side, Pendal Group and Dimensional Fund Advisors funds also count women among their manager ranks. Within broader asset classes, funds from MLC, AMP Capital, Advance International and FirstChoice Investments feature women.

It takes some digging to unearth the numbers. Morningstar surveys approximately 450 flagship Australian-domiciled retail funds and asks them to voluntarily self-report the names of their portfolio managers. For this research, we collected all the open-end retail funds under coverage (excluding ETFs) for which portfolio manager names are attached. This left a list of around 383 funds. Morningstar researchers identified each manager's gender by examining their first names; this was followed by manual verification where managers names were gender-neutral.

The data however does not distinguish between whether someone is a lead or co-lead portfolio manager or a support manager. Nor does it make clear the location of the manager.  For example, Flavia Cheong is listed on the management team of the Aberdeen Standard Asian Opportunities Fund (which is available to Australian investors) but works in Singapore, according to her LinkedIn profile.

The final list is not without problems. Several high-profile female portfolio managers are not listed as they do not oversee funds under Morningstar coverage. Sarah Shaw at 4D Infrastructure and Nikki Thomas at Alphinity Investment Management come to mind. The Morningstar coverage list was relied upon as it is the most complete set of data. Australian investment managers don't make the composition of their investment teams readily available to the public. Nor is Anne Anderson from UBS listed. This is because while she oversees a fund under Morningstar coverage, the firm has not listed her as a portfolio manager. Each fund also has its own hierarchy. Magellan Financial Group's Vihari Ross is a key decision-maker but because of her title, "head of research", she is excluded. To gather a more complete list, more public transparency of manager roles and gender is required. 

A problem of supply or demand?

Viljoen says the question is: are women underrepresented in the industry because of a lack of demand or a lack of supply? She adds: “On the demand side we definitely see evidence of change, with many companies now highlighting the need to increase gender diversity across their firms, and in some instances putting in place specific targets and milestones for this to be achieved within a given time-frame.”

On the supply side, says Viljoen, firms need to consider whether job descriptions are being written in a way that appeals to the widest possible audience. “It has often been said that if a female reads a job description, unless she thinks that she can do everything that is being asked of her, she may be put off from applying. In contrast, men are likely to apply if they can do 50 per cent of the requirements,” she adds.

While this year’s analysis shows some improvement, there is clearly a way to go. Some experts predict that the change in working habits and increasing acceptance of working from home could help to further level the playing field between men and women in the workplace. Viljoen says: “If there’s one change that might emerge from this pandemic it’s the potential for society to embrace more flexible work practices, which may help improve workplace diversity and potentially we will all be winners as a result.”