It's hardly a surprise that the asset management industry has a gender problem.
Even so, some might be taken aback by the actual scale of the issue. Of the 16,084 portfolio managers tracked by Citywire around the world, just 1,662 — or 10.3 percent — are women. In the United States that figure falls to 9 percent. (Citywire is a financial publishing and information group that tracks the performance of fund managers.)
There are multiple social and structural reasons for this but, crucially, no evidence that women underperform men when it comes to running money. In an effort to highlight the best female portfolio managers in the United States, Citywire tracked those with the highest levels of risk-adjusted returns over the past three years.
Additionally, to make the cut, the portfolio manager also had to have top-quartile absolute returns in her particular investment disciplines over that three-year period — be that large-cap U.S. equities or multisector bonds, right through to emerging markets.
You may be wondering who portfolio managers are, exactly, and what they do each day.
A portfolio manager is responsible for investing a mutual fund, exchange-traded fund or closed-end fund's assets, implementing its investment strategy and managing day-to-day portfolio trading. To be sure, a portfolio manager is one of the most important factors to consider when looking at fund investing.
They have a great influence on a fund, no matter if that fund is a closed or open mutual fund, hedge fund, venture capital fund or exchange-traded fund. The manager of the fund's portfolio will directly affect the overall returns of the fund. Portfolio managers, therefore, are usually experienced investors, brokers or traders, with strong backgrounds in financial management and track records of sustained success.
As for the Citywire rankings, although two of the managers are actually based outside of the United States, all 20 on this list run mutual funds that are available to U.S. investors.
While there is just one U.S. large-cap manager on the list, those investing beyond the States are better represented, with six such managers making the grade. Half of those specialize in emerging markets.
Top U.S. female portfolio managers Rank Name Company 1 Tiffany Hsiao Matthews Asia 2 Coleen F. Barbeau Franklin Templeton Investments (Franklin) 3 Ivka Kalus-Bystricky Knights of Columbus 4 Allison Fisch Pzena Investment Management LLC 5 Anne Bookwalter Walsh Guggenheim 6 Natalie N. Trevithick Payden & Rygel 7 Nicole Kornitzer Buffalo Mutual Funds 8 Luz Padilla DoubleLine Capital LP 9 Maria Negrete-Gruson Artisan Partners 10 Cindy Starke EULAV Asset Management 11 Amy Zhang Alger 12 Kathryn Mongelli BlackRock 13 Eileen Riley Natixis Investment Managers 14 Julie P. Callahan PIMCO 15 Daniela M. Mardarovici BMO Asset Management 16 Samantha S. Lau Alliance Bernstein 17 Kearny M. Posner Lord Abbett Ltd 18 Jane Henderson BNY Mellon Investment Management (Dreyfus Corp.) 19 Katherine Renfrew TIAA-CREF 20 Anupam Damani TIAA-CREF Source: Citywire USA"Anything that is international equities excludes the U.S.; therefore, it is much easier for those managers to outperform," said Frank Talbot, Citywire's head of investment research. "There's a lot of good managers in international equities, where the outperformance is above 50 percent, meaning that more than half of the fund managers add value in those peer groups."
Of the top five managers in this breakdown, the first four all run money in non-U.S. equities, with a solitary bond manager bucking the trend to take fifth place.
In at No. 1 is Tiffany Hsiao, who runs the Matthews China Small Companies Fund. San Francisco-based Hsiao grew up in Silicon Valley but has some important family connections further afield — both to the part of the world that she invests in and to the kind of companies she picks.
Hsiao's grandmother, although illiterate and widowed by the age of 26, singlehandedly raised a son who later emigrated from Taiwan to the United States and became the lead researcher in an electronics company that helped create the first laptop to use Intel's 386 processor.
"I saw firsthand that you can start small with innovation," Hsiao said. "As an innovator, you can really change the world. I saw that through my father."
Hsiao's focus on domestic companies within China not only has generated alpha but also has helped to shield the fund from the recent sell-off that hit Chinese stocks in the wake of the trade dispute with the United States.
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Hsiao said she has never let being a woman stop her from doing anything. "I think the most important advice I would give to women is that you have to find a company that really values your talent and your input," she said. "I was given the lead manager job at Matthews when I was eight months pregnant with my second child."
Another emerging markets star, Allison Fisch of Pzena Investment Management, is also on the lookout for good companies, but for a different reason.
Fisch is one of four managers on the Pzena Emerging Markets Value Fund — a deep-value strategy that invests in businesses that are currently "in pain," she said.
"What we are looking for is a good company where something bad has happened," Fisch said. "It can be either a self-inflicted error that the company did, or it can be pain throughout an entire industry or economy."
Whatever the case may be, the job of the research team is to figure out whether this is a temporary or permanent problem, she said.
As a psychology major who graduated with a liberal arts degree, Fisch did not consider a career in investing until she realized her interest in learning about different industries and understanding business models.
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"I really enjoy that aspect of the job, and I think that a lot of women maybe don't realize how great it is to work in investing," she said. "For people who are intellectually curious, enjoy analytics and really want to have a career where they can learn something new literally every day, this is a wonderful place to be."
Some recent research by Citywire found that mixed teams of male and female portfolio managers produce greater levels of outperformance than single-gender teams or funds run by one man or one woman.
The research found that not only do these mixed teams produce more bang for the buck, they also deliver while taking on less risk over the course of three years than male-only fund-manager teams.
"Research has shown that diverse teams are more effective, so the importance of diversity is being recognized in the industry," said top-ranked portfolio manager Nicole Kornitzer, who runs the Buffalo International Fund. "Mentalities are changing toward women, thanks in part to the dialogue that is happening across society. Now is a good time to accelerate the momentum," she said.
Another top-ranked manager, Samantha Lau, co-chief investment officer for small- and mid-cap growth equities at AllianceBernstein, is surprised that a meritocratic environment like asset management has not won over more women.
"Whether it's about language expertise, historical reasons or personal backgrounds, investments in emerging markets seem to lend themselves to women.""It is one of the few places where performance is black and white," said Lau, a 22-year veteran of the industry. "I'm accountable for how I perform, but I own my track record, and no one can take it away from me.
"So in a way, it eliminates a lot of the politics and ambiguity that some other professionals may face," she said.
Lau, who has been covering technology since 1997, is responsible for the technology sleeve of the AB Growth Discovery Fund. She ranks 16th on the list and is one of two U.S. small-cap managers to make this breakdown, alongside Amy Zhang of Fred Alger.
U.S. large-cap growth is generally considered about as difficult a category as any in which to add value over and above the index, but top-ranked fund manager Cindy Starke, who runs the Value Line Larger Companies Focused Fund, has achieved astonishing returns. She is one of just 36 managers out of the 159 in her peer group to have added value over the past three years.
On the fixed-income side, managers running multisector income funds have tended to outperform those running more constrained products and are well represented on our list.
To that point, Anne Bookwalter Walsh runs a lot of money and has been very impressive. Walsh, who is chief investment officer for fixed income at Guggenheim Partners, ranks fifth on the list for performance but would be No. 1 if it were based solely on the value of assets run. Walsh oversees a combined $180 billion in assets across all mandates.
Other multisector managers who made the list include DoubleLine Capital's Luz Padilla and BMO Asset Management's Daniela Mardarovici.
There is no evidence that women underperform men when it comes to running money. The fixed-income side is not just about multisector managers, however. As in equities, emerging markets are well represented among the bond managers. One of these is Katherine Renfrew, who runs the TIAA-CREF Emerging Markets Debt Fund alongside Anupam Damani.
Renfrew said she became interested in emerging markets at an early age. She took an introductory Chinese language class while in high school and visited China in 1988 right after she finished college.
Renfrew said that women have been well represented in her specialist area for some time, and she felt encouraged by their growing presence.
"Emerging markets debt is a place where more women came into the field early on," Renfrew said. "Whether it's about language expertise, historical reasons or personal backgrounds, investments in emerging markets seem to lend themselves to women.
"It's just the nature of the job, which means you have to be almost more multicultural, which means that there are a lot more women getting into the field," Renfrew added.
— By Vicky Ge Huang, Citywire
