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Alpha Female 2018: Mixed-gender teams produce better returns

If you want higher returns without overloading on risk, a balanced line-up of portfolio managers makes sense, Citywire research finds.

Alpha Female 2018: Mixed-gender teams produce better returns

Is it better to have your money run by a man or a woman? The answer, it seems, is both, together. That’s according to exclusive Citywire research into the gender dynamics of the asset management industry.

In the third edition of our annual Citywire Alpha Female study [click here for the full report], we find 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. Mixed teams also return more over a three-year period than female-only ones, although female-only teams do have a lower level of risk in their approaches.

In basic terms, mixed-gender teams produce three-year returns that are 4.3% higher on average than the returns of female-only teams. Mixed teams also outperform male-only teams by 0.5% over the same timeframe.

This also holds true if you break it down by asset class, with mixed teams outperforming single-sex teams in bonds, equities and mixed assets in terms of absolute returns over three years.

While the positive picture for mixed teams is the headline finding of this year’s report, the overarching study indicates that female fund managers are still highly under-represented in the asset management industry, with just one in 10 fund managers being a woman.

The data in the study covers the three years to the end of May 2018 and accounts for all investment sectors and managers tracked in Citywire’s 16,000-strong fund manager database. All performance figures are calculated in sterling terms.

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