Researchers Xu Chen, Meifen Qian, Juan Yao and Bin Yu from the Zhejiang and Sydney universities have uncovered an interesting ‘tick’ in terms of how women allocate money to mutual funds (at least in China).
Using data from over 97,000 mutual fund investors the paper highlighted today shows female investors have an affinity for female-managed funds.
The researchers looked specifically at situations where a man was replaced by a woman managing a fund and found flows increased from female investors from that point.
Studies in the West have regularly concluded women make better investors than men. They trade less, are more data driven and not inclined to maverick betting. So is it superior performance that’s attracting the new investors? Not in this China example.
The effect appears to be entirely “..female-to-female homophily..”. If this is the case the effect should be of great interest to larger institutional investors, and I’d wager it’s not a China-specific phenomenon.
Of at least or even greater interest to Fund Management groups may also be the finding that female investors allocating to female managers are a ‘sticky’ lot and tend to stay with a Fund even when performance goes through a rough patch. Well, guys? Go figure.
You can read the paper in full via the following link Capital Allocation to Female Fund Managers.
Happy Sunday.