It will be news to no one that the asset management industry has a gender problem. Even so, some might be surprised by the scale of the issue. Of the 16,084 portfolio managers tracked by Citywire around the world, just 1,662 – or 10.3% – are women. In the US, that figure falls to 9%.
There are multiple social and structural reasons for this, but crucially there is no evidence that women underperform men when it comes to running money.
In an effort to highlight the best female fund managers in the US, we have looked at the 20 women with the highest levels of risk-adjusted returns over the past three years.
To make the cut, they must also have top-quartile absolute returns in their particular investment disciplines over that period – be that large-cap US equities or multi-sector bonds, right through to emerging markets.
Not at home right now
While there is just one US large-cap manager on the list, those investing beyond the States are better represented, with six such managers making the grade. Half of those specialize in emerging markets.
‘Anything that is international equities excludes the US, therefore it is much easier for those managers to outperform. There’s a lot of good managers in international equities, where the outperformance is above 50%, meaning that more than half of the fund managers add value in those peer groups,’ said Frank Talbot, Citywire’s head of investment research. ‘It’s a really good time to be an international equity manager. If you’re on the right side of the Tencent/Alibaba call, you have already outperformed.’
Of the top five managers in this breakdown, the first four all run money in non-US equities, with a solitary bond manager bucking the trend to take fifth place.
In at number one is Tiffany Hsiao (pictured below), who runs the Matthews China Small Companies fund. San Francisco, California-based Hsiao grew up in Silicon Valley but has some important family connections further afield – both to the part of the world that she invests in and to the kind of companies she picks.
Hsiao’s grandmother, although illiterate and widowed by the age of 26, single-handedly raised a son who later emigrated from Taiwan to the US and became the lead researcher in an electronics company that helped to create the first laptop to use Intel’s 386 processor.
‘I saw firsthand that you can start small with innovation,’ Hsiao told Citywire. ‘As an innovator, you can really change the world. I saw that through my father.’
Hsiao’s focus on domestic companies within China has not only generated alpha but has also helped to shield the fund from the recent sell-off that hit Chinese stocks in the wake of the trade dispute with the US.
Hsiao said she has never let being a woman stop her from doing anything. ‘I think the most important advice I would give to women is that you have to find a company that really values your talent and your input. I was given the lead manager job at Matthews when I was eight months pregnant with my second child,’ she said.
|Name||Fund name(s)||Sector||Total return (%)||Manager ratio||Citywire rating|
|Tiffany Hsiao||Matthews China Small Companies||Equity - China Region||46.31||1.53|
|Coleen F. Barbeau||Franklin International Growth||Equity - International Multi-Cap Growth||39||0.97|
|Ivka Kalus-Bystricky||Catholic Investor International Equity||Equity - International Multi-Cap Core||27.95||0.96|
|Allison Fisch||Pzena Emerging Markets Value||Equity - Emerging Markets||22.91||0.9|
|Anne Walsh||Guggenheim Municipal Income||Bonds - General & Insured Municipal Debt||8.04||0.85|
|Guggenheim Floating Rate Strategies||Bonds - Loan Participation||11.14|
|Guggenheim Investment Grade Bond||Bonds - Core Plus Bond||11.88|
|Guggenheim Total Return Bond||Bonds - Multi-Sector Income||12.89|
|Wilshire Income Opportunities||Bonds - Multi-Sector Income||12.89|
|Natalie N. Trevithick||Payden Corporate Bond||Bonds - Corporate Debt BBB-Rated||13.51||0.81|
|Payden Global Fixed Income||Bonds - Global Income||8.04|
|Nicole Kornitzer||Buffalo International||Equity - International Multi-Cap Growth||30.78||0.79|
|Luz Padilla||DoubleLine Low Duration Bond||Bonds - Short Investment Grade Debt||5.93||0.77|
|DoubleLine Low Dur Em Mkts Fixed Income||Bonds - Emerging Mrkts Hard Currency Debt||8.47|
|DoubleLine Emerging Markets Fixed Income||Bonds - Emerging Mrkts Hard Currency Debt||8.47|
|AMG Managers DoubleLine Core Plus Bond||Bonds - Multi-Sector Income||7.06|
|Maria Negrete-Gruson||Artisan Emerging Markets||Equity - Emerging Markets||30.25||0.67|
|Cindy Starke||Value Line Larger Companies Focused||Equity - Large-Cap Growth||59.35||0.6|
|Value Line Capital Appreciation||Mixed Assets - Mixed-Asset Target Alloc Moderate||35.43|
|Amy Zhang||Alger Small Cap Growth||Equity - Small-Cap Growth||48.14||0.57|
|Alger Small Cap Growth Institutional||Equity - Small-Cap Growth||48.14|
|Alger Small Cap Focus||Equity - Small-Cap Growth||48.14|
|Kathryn Mongelli||BlackRock Mid-Cap Growth Equity Portfolio||Equity - Mid-Cap Growth||47.64||0.55|
|Eileen Riley||Loomis Sayles Global Allocation||Mixed Assets - Flexible Portfolio||28.94||0.49|
|Julie P. Callahan||Pimco Fixed Income Shares Series TE||Bonds - Other States Intermediate Muni Debt||14.29||0.49|
|Pimco Short Duration Municipal Income||Bonds - Short Municipal Debt||3.31|
|Pimco California Short Duration Muni Inc||Bonds - California Sh-Intmdt Municipal Debt||2.8|
|Daniela M. Mardarovici||BMO TCH Corporate Income||Bonds - Corporate Debt BBB-Rated||12.95||0.48|
|BMO TCH Core Plus Bond||Bonds - Core Plus Bond||8.11|
|BMO Strategic Income||Bonds - Multi-Sector Income||7.73|
|Samantha S. Lau||AB Discovery Growth||Equity - Mid-Cap Growth||44.77||0.46|
|AB Small Cap Growth Portfolio||Equity - Small-Cap Growth||50.15|
|Kearny M. Posner||Lord Abbett Floating Rate||Bonds - Loan Participation||13.93||0.38|
|Jane Henderson||Dreyfus US Equity||Equity - Multi-Cap Growth||43.62||0.37|
|Dreyfus International Stock||Equity - International Large-Cap Growth||26.99|
|Dreyfus Global Stock||Equity - Global Large-Cap Growth||33.56|
|Katherine Renfrew||TIAA-CREF Emerging Markets Debt||Bonds - Emerging Mrkts Hard Currency Debt||17.54||0.33|
|Anupam Damani||TIAA-CREF International Bond||Bonds - International Income||17.54||0.33|
Picking up the pieces
Another emerging markets star, Allison Fisch of Pzena Investment Management, is also on the lookout for good companies, but for a different reason.
Fisch is one of four managers on the Pzena Emerging Markets Value fund – a deep value strategy that invests in businesses that are currently ‘in pain.’
‘What we are looking for is a good company where something bad has happened. It can be either a self-inflicted error that the company did or it can be pain throughout an entire industry or economy,’ she said. ‘But whatever the case may be, the market is behaving as though the business is permanently impaired and then the job of our research team is to figure out whether this is a temporary or permanent problem.’
As a psychology major who graduated with a liberal arts degree, Fisch (pictured above) did not consider a career in investing until she realized her interest in learning about different industries and understanding business models.
‘I really enjoy that aspect of the job and I think that a lot of women maybe don’t realize how great it is to work in investing,’ she said. ‘For people who are intellectually curious, enjoy analytics and really want to have a career where they can learn something new literally every day, this is a wonderful place to be.’
‘For me, I love this industry and I love this job so I can say that if you have that passion for investing, regardless of gender, I think it’s a fascinating job.’
'In life, adversity is inevitable. What matters in the face of it is resilience. When you face these inevitable struggles and challenges, you have to be resilient enough to stand back up after the fall and keep going,' she said. 'The good news is, though, that if you’ve followed my first piece of advice and worked to develop your relationships with your team, when the waters get choppy, your team will be there to help support you, which is critical.'
Best of both
It is beneficial for investors too if more women get into asset management. Recent research by Citywire found that mixed teams of men and women produce greater levels of outperformance than single-gender teams or funds run by a solo man or woman. Not only do they produce more bang for your buck, but mixed teams also do it while taking on less risk over the course of three years than male-only fund manager teams.
‘Research has shown that diverse teams are more effective, so the importance of diversity is being recognized in the industry. Mentalities are changing toward women, thanks in part to the dialog that is happening across society. Now is a good time to accelerate the momentum,’ said Nicole Kornitzer, who runs the Buffalo International fund.
Samantha Lau, co-chief investment officer for small- and Smid-cap growth equities at AllianceBernstein, is a 22-year veteran of the industry and is surprised that a meritocratic environment like asset management has not won over more women.
‘It is one of the few places where performance is black and white. I’m accountable for how I perform, but I own my track record and no one can take it away from me,’ she said. ‘So in a way, it eliminates a lot of the politics and ambiguity that some other professionals may face.’
Lau, who has been covering technology since 1997, is responsible for the technology sleeve of the AB Growth Discovery fund. She ranks 16th on our list and is one of two US small-cap managers to make this breakdown, alongside Amy Zhang of Fred Alger.
US large-cap growth is generally considered about as hard a category as any in which to add value over and above the index, but Citywire AA-rated Cindy Starke, who runs the Value Line Larger Companies Focused fund has achieved astonishing returns. She is one of just 36 managers out of the 159 in her peer group to have added value over the past three years.
On the fixed income side, managers running multi-sector income funds have tended to outperform those running more constrained products and are well-represented on our list.
‘Citywire AAA-rated Anne Walsh runs a lot of money and has been very impressive,’ Talbot noted. Walsh, who is chief investment officer for fixed income at Guggenheim Partners, ranks fifth on our list for performance, but would be number one if it was based solely on the value of assets run. Not only is she named on the greatest number of funds on the list – with six to her name – but she also oversees a combined total of $180 billion in assets across all mandates.
The fixed income side is not just about multi-sector managers though. As in equities, emerging markets are well represented among the bond managers.
Renfrew said she became interested in emerging markets at an early age. She took an introductory Chinese language class while in high school and visited the country in 1988 right after she finished college.
Renfrew said that women have been well-represented in her specialist area for some time, and she felt encouraged by their growing presence.
‘Emerging market debt is a place where more women came into the field early on,’ Renfrew said. ‘Whether it’s about language expertise, historical reasons or personal backgrounds, investments in emerging markets seem to lend themselves to women. It’s just the nature of the job, which means you have to be almost more multicultural, which means that there are a lot more women getting into the field.’
'At no point did I ever see myself as anything different than my colleagues and I expected to be treated exactly the same,' she said. 'I’ll admit that I was very naïve early in my career in thinking that hard work alone would be enough to level the playing field that has historically disadvantaged women in terms of pay, promotion while penalizing them for being 'difficult.'
'Almost every woman I know in this business has a story or experience of these obstacles. But I hope we’re moving in the right direction and that awareness, education and most importantly, accountability will foster change.'