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Returns For Women Hedge Fund Managers Beat Everyone Else’s

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"Returns For Women Hedge Fund Managers Beat Everyone Else’s"

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Woman investment hedge fund banker

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During the six years between January 2007 and June 2013, hedge funds run by women had a 6 percent return, according to numbers from the firm Rothstein Kass, which tracks the industry. By comparison, a global hedge fund index, the HFRX, had a 1.1 percent loss during that time. The women even beat the stock market, as the Standard & Poor’s index saw a 4.2 percent gain between 2007 and 2013.

Last year was also the second year in a row that women running hedge funds beat men doing the same, with a 9.8 percent return compared to men’s 6.13 percent.

Rothstein Kass has an index that tracks 80 of world’s women-run hedge funds out of about 125 total. Women manage just a small fraction of the $2.5 trillion in hedge funds overall.

But it may be smart to increase the number of women running the funds. These findings fit into a larger body of evidence that women can bring smarter investment decisions or better value when in leadership roles. A seven-year study found that women picking stocks outperformed men doing the same by 1.4 percent, and female investment groups did even better, beating men by 4.6 percent. The researchers found that men trade more often, increasing the chance that they would lose money and run up transaction costs. Similarly, a survey of 600 company board directors found that women make decisions that are more likely to lead to higher performance.

And other research has born out the idea that women bring decision-making that leads to better outcomes, as three different studies found that companies with women on the boards saw higher stock performance and better returns. They also protect a firm’s current value.

Despite all of this evidence, women still hold a small share of the positions that would maximize the benefits of increased diversity. They hold less than 20 percent of the top roles on Wall Street and some of the largest banks have barely any women executives at all: Citigroup has none and JP Morgan and Morgan Stanley have just one each. Overall they are rare in the executive suites of the country’s largest companies, holding just 14.6 percent of executive officer positions at Fortune 500 companies. They are also rare on corporate boards, holding less than 17 percent of board seats at these companies, a figure that has stayed flat for eight years.

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