In Investment Metrics’ June 2021 research we assessed if there has been any movement in the representation of female portfolio managers at asset management firms. Unfortunately, the short answer was no
For International Women’s Day this year we ran a similar study to assess what has changed since that 2021 study leading up to December 2022.
The study reviewed the separate account and commingled fund active manager peer groups in our Investment Metrics Global Database and took a sample of portfolios from the US large-cap equity, non-US large-cap equity, global large-cap equity, and emerging markets equity universes. Overall, we reviewed 242 active manager portfolios to see how many products had a female portfolio manager in the lead or co-lead position. The good news is we did see significant institutional net in-flows to some of these female-led portfolios, despite a difficult public equity market of 2022. Demonstrating such institutional investor demand for female-led portfolios is important to generate change in the investment industry and achieve equal representation. We also highlighted some of the portfolios that have consistently performed well against peers.
In the summer of 2021, we found that 13% of the portfolios we reviewed had a female in the lead or co-lead portfolio manager position. As of December 2022, that figure is unchanged at 13%. Interestingly, the largest representation of female portfolio managers was in non-US large-cap equity, at 18% of the sample. We are not sure why this would be the case. Conversely, in global and US large-cap equity, there is a stark difference in representation. Many asset management firms have set up initiatives around diversity, equity, and inclusion as well as their ESG analysis capabilities. Over time, hopefully, these representation figures will improve but the progress of this change so far has been lethargic.
According to our quarterly net flows report that is calculated based on asset manager provided tax-exempt strategy asset information, there were some female-led portfolios that saw substantial institutional in-flows. Rupal Bhansali, CIO and portfolio manager at Ariel Investments, had over $700 million of combined institutional in-flows in 2022 into her International Equity and Global Equity portfolios. Sarah Ketterer, CEO and fundamental portfolio manager at Causeway Capital, had $198 million of in-flows into her International Value Select product. Mondrian Investment Partners had two female-led portfolios receive institutional in-flows: Elizabeth Desmond’s Focused International Equity strategy gathered $150 million while Aileen Gan’s Global All-Country World portfolio received $85 million.
Based on our analysis, some of the most consistent portfolios in terms of their performance against their respective benchmarks and peers are led by women. Cassandra Hardman’s International Equity product at Hardman Johnston ranks in the top quartile against peers over the long-term. Similarly, Sarah Ketterer’s International Value Select portfolio ranks in the top quartile against her peers over most trailing time periods. Eileen Riley’s Global Equity Opportunities portfolio at Loomis, Sayles & Company consistently performed above-median level against other active managers.
In summary, we have not seen much movement from institutional asset managers with regards to female portfolio managers in the lead or co-lead position. It’s important to note that it’s only been a year-and-a-half since we did this study, a relatively short time period. As more investors are made aware of the striking difference in representation, presumably, more women will be given opportunities to lead portfolio management teams. Yet, I believe this will only happen if institutional investors continue to demand and place plan assets with female-led portfolio management teams.
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