Why You May Want a Woman Managing Your Money
The hedge fund industry isn’t known for its gender diversity. It usually conjures up images of men in power suits eating steak dinners.
And yet, when it comes to returns, women are the ones leading the field.
For the second year in a row, female hedge fund managers have outperformed the industry overall: While those run by women returned almost 10% from January 2013 to November 2013, the general HFRX Global Hedge Fund index was up only about 6% during that same period, according to a new report by professional services firm Rothstein Kass.
The results are even more astounding when they include the six years between January 2007 and June 2013: In that time period, women-managed hedge funds returned 6%—compared to the index’s loss of 1.1%.
What’s the deal? Some experts say that women’s investing success may be boosted by biological factors. “There have been studies that show that testosterone can make men less sensitive to risk-reward signals, and that comes through in this study,” Meredith Jones, a director at Rothstein Kass, told Reuters.
And while women-led hedge funds only control about 3% of global hedge fund assets of $1.5 trillion, there seems to be growing optimism that females will command a larger portion in the future: According to the study, almost 18% of senior women in the industry said they want to run their own fund within the next five years—compared to about 14% a year ago.