James Dennin, Kapitall: Women-run funds outperformed last year. Is there a good explanation for this or are women just better?
This morning the President of Women’s Institute for a Secure Retirement, Cindy Hounsell, went on air with National Public Radio to try and explain why more women aren't investing — even though a lot of research has emerged this year which suggests they might be better at it.
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The article has prompted many responses, including this one from Quartz, which seems to accept all of the study's findings pretty gleefully, saying "the difference is probably due to testosterone levels."Call me crazy, but I find the idea that there's a chemical which you can take (or not take) that will make you better at making money, a bit hard to swallow. Even if testosterone has been linked to risk appetite. And yet and yet the noticeably higher returns are hard to ignore. Women-run funds, though there are far fewer of them, consistently earn higher returns. One more plausible explanation, might be that male-dominated environment of Wall Street makes it harder for women to succeed. The ones that do, then, are by consequence much better than the pack. Either way, whether the result of biology or social conditioning: for now the evidence seems clear that there are tangible economic benefits for having more women in the room, and possibly to having one in charge of it. Read more about women CEOs. There are only about 80 women-run funds world-wide, but these earned an average 6% — almost 6 times the average for funds. We decided to build a list of stocks using the holdings for one of the largest woman-run funds, Litespeed Management, captained by Jaime Zimmerman. Zimmerman's fund has performed incredibly well since its founding in 2000, earning a 118% between 2000-2005, a time when the S&P contracted. Her fund is up 1.18% so far this quarter. We built a list of the fund's top 6 holdings by weight.