Special Report: Women in Investing

Skilled female fund managers, analysts, advisors and planners share how women should make money work harder for them

Ruth Saldanha 9 March, 2020 | 1:55AM

Woman with umbrella

The 8th of March is International Women’s Day, and it's the perfect time to talk about women and finance, and why women need to think differently about money.

For one, women need to plan for different circumstances than men. We have longer lifespans, tend to be caregivers for both parents and children, and as a result, we may take breaks from the workforce. Even when we do work, we tend to earn less. Here’s some data about women in Canada.

According to the Government of Canada, women in Canada who work full-time earn on average only 87 cents to every dollar earned by men.

A more recent study has even more dire findings. A new study by Leger Research commissioned by ADP Canada finds that based on self-reported numbers, Canadian women earned an average pre-tax salary of $51,352 in 2019, while men reported an average pre-tax salary of $67,704 – a gap of 24%. When examining additional compensation (bonuses, profit sharing), men reported receiving over double the amount that women received. In 2019, men received an average of $7,646 in additional compensation, while women received $3,250. This marked a 25% increase for men and a 17% decrease for women when compared to 2018.

Women also continue to be under-represented in leadership and executive positions. The ADP-Ledger study found that men are more likely to be a manager or executive in their workplace (28% of men were managers or executives, compared to 19% of women).

It’s worse when it comes to money managers. My colleague Ian Tam, who is Morningstar’s Director of Investment Research, tried to understand the extent to which women were represented in our fund industry. He started with filtering on the longest-tenured portfolio managers on a fund’s team, and whether that list of names included women. Here are the initial findings:

Female Representation on Longest Tenured Management Team?

Assets Managed (CAD)

# of Funds Managed

No

 $     1,250,321,361,597

79%

15160

85%

Yes

 $        326,299,430,086

21%

2663

15%

Source: Morningstar Research Inc. & Authors’ Calculations

Unsurprisingly and yet disappointingly, the number and size of funds (share classes) that have at least one long-tenured female portfolio manager in Canada are dwarfed by those that do not.

The reasons for this disparity are myriad, some social, some institutional, some innate. It isn’t because women don’t excel – they do. This week, we decided to focus on female excellence. Every day of this week, we will feature a skilled female mutual fund manager, and we will speak to advisors, analysts and planners, to help women make their money work harder for them. Here’s some of what you can expect:  


Monday:

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

How to play these volatile times
COVID-19, rate cuts, and talk of recessionary risks - what are investors to do? Scotia's Judith Chan weighs in.


Tuesday:

The virus and income
It's safe to say that rates are going to lower, for longer while we wait to see how the coronavirus evolves: Beutel Goodman's Sue McNamara

5 steps women can take to improve their retirement readiness
The data are sobering about women's retirement preparedness, but being pre-emptive can help stave off a shortfall


Wednesday:

Were the rate cuts a reality check?
Why Fiera Capital's Candice Bangsund is still favouring stocks in her asset allocation

4 large-caps led by women
Female CEOs have a history of strong returns and skilled management, and they're at the helm of these undervalued companies

What should women ask their financial planners?
Get personal, express yourself and explore risks when seeking advice

 

Thursday:

Small caps in slowdowns
Invesco global small cap manager Virgina Au shares where she's focused right now

8 standout companies run by women
These firms have carved out economic moats and are led by female CEOs

 

Friday:

Is there gender bias in financial advice?
How advisors can recognize and avoid gender bias in practice

 

And before you go, Sarah Newcomb, Senior Behavioral Scientist at Morningstar has some advice for all women:

“My advice is: Go for the Promotion. Ask for the raise. Ask for more money. Women need to value themselves more. While it is important to get 6% as against 4%, but it is even more important to earn more money over years and years. Women should ask for more. That’s the best money advice I can give”

Read our latest research paper “Gender Bias in Asset-Allocation Advice: How Eliminating Possible Sources Might Point the Way to a Solution.”

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About Author

Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca