The Stalwart picked up on a piece we had noticed that attempts to measure preferences for risk across groups. Now Mark Hulbert in the New York Times highlights some research that shows differences in the ways men and women manage money, specifically mutual funds.
It seems that gender differences manifest themselves in a number of ways. Male fund managers seem to do a number of things which would be perceived as being riskier including:
- Make more aggressive bets;
- Are more prone to style drift, and
- Have higher turnover.
Surprisingly this did not add up to better raw performance for female managers. However, female managers tend to be truer to their investment style and therefore are a better bet within a diversified portfolio.
In short, the researchers found no justification for investors to prefer mutual funds managed by men. In fact, when building portfolios, investors may find that funds managed by women are better.
Fans of behavioral finance should check out Hulbert’s article and the underlying paper. Worth a look.