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2020 is not just the 100th anniversary of women’s suffrage in the U.S. It’s also a year that female-managed large cap U.S. mutual funds outperformed male-managed mutual funds despite their relatively small share of that market.

According to research from Goldman Sachs, female-managed large-cap funds — where women occupied at least one-third of the manager slots — lost two-thirds less than funds managed by men when compared to their respective benchmarks through Aug. 26 — 0.57% versus 1.64%.

“Female-managed funds withstood many of the market swings, with the the median fund outperforming its benchmark by 50 basis points from the start of the year to March 23rd” and 48% of those funds generating alpha afterward, write Goldman Sachs researchers led by David Kostin, the firm’s chief U.S. equity strategist.

In contrast, the typical large-cap funds with no female portfolio managers lagged their benchmark by 20 basis points from Jan. 1 to March 23 and just 37% subsequently generated alpha, according to the Goldman Sachs researchers.

Moreover, the median all-female-managed fund had a Sharpe ratio, which measures risk-adjusted return, almost three times as great as that of the typical all-male fund year to date through Aug. 26 — 0.33% vs. 0.12%. 

The reason for these disparities: tech stocks and financials. Female-managed large-cap funds own more of the former, especially software and hardware stocks, and male-managed funds hold more of the latter. Both fund groups were underweight tech, though female managers were less underweight, and both groups were overweight financials, with male-managed funds having the greatest exposure.

Female-managed funds held more Amazon, Apple, Microsoft and Tesla stock than male-managed funds and had less exposure to Berkshire Hathaway B shares, Wells Fargo, Verizon, UnitedHealthcare Group and ExxonMobil.

Despite their superior performance, however, female-managed large-cap mutual funds experienced slightly more outflows than male-managed funds — 5.7% versus 5.5% through much of the year so far, according to Goldman Sachs. And they continue to be underrepresented in the U.S. large-cap fund universe. 

All-female managed funds account for just 3% of the 496 large-cap mutual funds analyzed by Goldman Sachs and 2% of their total assets, which approximate $2.3 trillion. All-male managed funds, in contrast, account for 77% of large-cap U.S. mutual funds.

Funds with women accounting for at least one-third of their portfolio managers were 13% of U.S. large-cap funds and held 12% of their assets.

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