Few women run mutual funds around the world, but they're even more scarce in the United States than in other countries, and their ranks have been shrinking in recent years.
Less than 10 percent of all U.S. fund managers are women, which means that someone has a better chance of rolling a seven at the craps table than finding a fund run by a woman. A new report from Morningstar shows that the percentage has been on a slow decline since 2008, when 11.4 percent of U.S. fund managers were women. It also shows that other countries have higher percentages of female fund managers, though none get close to the 50 percent threshold. Singapore tops the list at 30 percent.
"I've worked in this industry for more than 15 years, and I knew there was an imbalance," says Laura Pavlenko Lutton, one of the study's authors and the North America practice leader for Morningstar's manager research. "But I didn't recognize how significant it was until we actually looked at the numbers."
Why should the gender disparity matter? Maybe it shouldn't, as long as the best managers are finding their way into positions atop funds, so that investors' dollars can best grow to pay for retirements, college tuitions or peace of mind. Morningstar is looking at the performance of female managers versus their male counterparts, to see if there's any separation.
But research suggests that women tend to hold onto investments longer, even through bouts of volatility, which can lead to better long-term returns. Female professional investors are also more likely than their male counterparts to define success as meeting long-term goals, rather than beating peers or index benchmarks, according to State Street's Center for Applied Research.
At the very least, history has shown that going all-in on any one investment idea can increase risk. Having a diversity of thought, backgrounds and approaches among fund managers could be as beneficial as having a diversified portfolio of stocks and bonds.
Where female fund managers have been making strides is in areas of the market that have seen some of the fastest growth. Women are more likely to manage an index fund, for example, than an actively managed one that tries to beat the index by picking winners and avoiding losers.
Women are also more likely to be managers of funds with socially responsible investment strategies, such as those that look for companies with strong environmental or corporate-governance records, though the gap has narrowed in recent years. And women have better odds of running a fund as part of a management team, rather than as a solo manager.
Given where women are most likely to be fund managers, Ann Miletti is close to an anomaly. She's the solo manager atop several actively managed mutual funds, including the $1.7 billion Wells Fargo Opportunity fund.
She notices how few of her fellow fund managers are women — she's often the only woman in the room at analyst conferences and other meetings — and she attributes part of it to the small pool of female candidates looking to become fund managers.
When funds are looking to hire a manager, they tend to consider senior analysts, and relatively few are women. Go down a rung on the seniority ladder, and the picture is similar. Even on university campuses, when Miletti is talking with professors for corporate recruiting, she often sees relatively few women looking to go into finance, an industry that's sometimes portrayed as cold or even immoral.
The fund industry is also one that can require a lot of hours and travel, which could discourage women looking for careers that will allow for flexibility if children enter the picture, says Miletti, who is a mother.
The dearth of women at the top of the fund industry may be part of a self-fulfilling cycle, where few young women go into the industry because they see few already in it. The numbers are low enough that female managers are often conscious of how unusual they are.
"I try to take a glass half-full approach to it," Miletti says. "I've always tried to think about it as: I'm the only female in the in the room, so if I meet this CEO or CFO again, they might actually remember me."
Still, being the only female in the room can also be annoying. Just a couple years ago, Miletti was waiting in a hotel conference room for a meeting. When the corporate executives entered, they asked if she was going to clear the table, which had the remnants of someone's lunch, thinking that she was a hotel employee. That's when Miletti sat down at the table.
Nevertheless, Miletti says she's hopeful that the gender disparity will narrow with time. "I am fairly optimistic because there are people who are focused on it today," she says. "You didn't see stories 10 years ago about this. Attention and awareness tend to start to bring activity."