Women in Investing: Morningstar's view

Morningstar has combed its databases and analyzed the numbers. Here's where women stand in the industry today. 

Laura Lallos 9 March, 2020 | 1:10AM

This article is part of our Women and Investing special report.

The state of women in the investment industry and corporate world is still nascent—but some areas are poised for growth.

Using its proprietary databases, Morningstar has examined how women are faring today. Women remain dramatically underrepresented among the ranks of mutual fund managers. Yet the fund industry itself acknowledges the advantages of institutional diversity: It has become a significant advocate for diversity at the publicly traded corporations it invests in. That kind of shareholder engagement, combined with a recent legislative mandate, is beginning to show results in increased numbers of women on U.S. corporate boards. Meanwhile, although women-led startups still receive a disproportionately small share of venture capital, they are breaking into the system.

The fund industry falls short
When it comes to gender diversity, the global fund industry looks much like it did 20 years ago: At the end of 2000, 14% of fund managers were women. And at the end of 2019, 14% of fund managers were women. 

That’s the latest finding from Morningstar’s quantitative research group. Associate director Madison Sargis and associate analyst Amrutha Alladi recently updated some of the numbers underlying Sargis’ 2016 white paper, “Fund Managers by Gender: The Global Landscape.” Harnessing Morningstar’s global database of funds registered in 56 countries, they determined the gender of more than 25,000 fund managers using information provided by fund companies when available and a proprietary algorithm that assigns a probability of a manager name being a woman’s based on local census data.

There are geographic bright spots, mostly in smaller markets, including Hong Kong, Singapore, and Spain, where more than 20% of fund managers are women. However, some of the largest financial centers remain below the global average, including the United Kingdom (13%) and the United States (11%).

Morningstar’s U.K. team encapsulated the imbalance neatly with this recent headline: “More Funds Run by Daves Than Women.” That is, there were 108 U.K. funds run by managers named David or Dave in Morningstar Direct—and only 105 funds run by women of any name.

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About Author

Laura Lallos  Laura Lallos is a former Morningstar analyst and editor, and a frequent contributor to Morningstar Advisor magazine.