Is there a good explanation for higher returns in women-run funds?

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. 

Read more from Kapitall: Hedge funds like these 7 Chinese tech stocks

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. 

Click on the interactive chart to view data over time. 

1. SandRidge Energy, Inc. ( SD): Operates as an independent natural gas and oil company in the United States. Market cap at $3.19B, most recent closing price at $6.59.

 

 

2. Freeport-McMoRan Copper & Gold Inc. ( FCX): Engages in the exploration, mining, and production of mineral resources. Market cap at $34.47B, most recent closing price at $33.21.

 

 

 

3. Barrick Gold Corporation ( ABX): Engages in the production and sale of gold, as well as related activities, such as exploration and mine development. Market cap at $23.03B, most recent closing price at $21.23.

 

 

 

4. Cooper Tire & Rubber Co. ( CTB): Cooper Tire & Rubber Company, together with its subsidiaries, manufactures and markets replacement tires in North America and internationally. Market cap at $1.51B, most recent closing price at $23.86.

 

 

 

5. Theravance Inc. ( THRX): Engages in the discovery, development, and commercialization of small molecule medicines for various therapeutic areas, including respiratory disease, bacterial infections, and central nervous system (CNS)/pain. Market cap at $4.32B, most recent closing price at $39.78.

 

 

 

6. Tronox Limited ( TROX): Produces and markets titanium bearing mineral sands and titanium dioxide (TiO2) pigment. Market cap at $2.52B, most recent closing price at $22.24.

 

(List compiled by James Dennin, a Kapitall writer. Monthly returns sourced from Zacks Investment Research; portfolio information sourced from Insider Monkey.)

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