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May 03, 2010 at 08:00 PM
Women are managing wealth, in numbers that are ever-so-slowly creeping up, and outperforming to boot. There’s good news and bad news on this asset management front. The severity of the financial crisis prompted the National Council for Research on Women (NCRW) to look into the causes of the financial crisis and “explore the exclusionary biases that are present in the business of money…” adding, “the crisis itself compels us to ask if we can afford NOT to tap the differing experiences, perspectives and investment styles that women bring to fund management…”
“Women in Fund Management: A Road Map for Achieving Critical Mass – and Why it Matters“ posits that the financial crisis is, “a dramatic lesson that it profoundly matters who manages our money and how investment decisions are made.” The report asks: “why there are so few women at the top levels of professional money management, and, whether it matters.”
The report says that in the overall American economy “women started new businesses at twice the rate of men and represented one-third of all business owners, generating about $939.5 billion in revenues,” citing numbers from the U.S. Census Bureau’s 2002 Survey of Business Owners. Women make up 43% “of Americans with gross assets of $1.5 million or more,” the report adds–almost 1.2 million women–according to the Internal Revenue Service’s 2004 Personal Wealth Tables.
First, the bad news:
The NCRW report argues that women, as of 2008, managed only 1% of mutual funds and 3% of hedge funds. But those who manage those funds tend to outperform. “Women,” the report explains, “constitute only 16% of executive and board positions in the financial services and less than 10% in fund management.”
Now the brighter news:
But the women in fund management tend to outperform: The NCRW report also notes that at Pax Funds, women make up half of the six U.S.-based portfolio managers–and that is “by design.” The report adds that Pax President and CEO Joe Keefe says the firm, “has found that women give careful attention to risk, focus on the long term and often ask more penetrating questions than men in building their analyses.”
