Duringthe past 15 years, actively managed fixed-income funds run by womenoutperformed the average returns of their respective sectorcategory by 0.35 percent annually. (Photo: Shutterstock)

(Bloomberg) –Fixed-income mutual funds run by women haveoutperformed funds run by men since 2003, so you'd think the numberof female managers would be rising.

But the opposite is true: Only 14 U.S. debt funds were managedexclusively by women as of September 2017, compared with 47 in2004, according to Morningstar Inc. And the share of womenoverseeing bond or equity assets has stalled at about one in 10since 2015.

That's partly because it can take years to win a managementrole; and strong, confident women who entered the business severaldecades ago weren't always welcomed, say some female fundmanagers.

That dynamic combines with a shortfall of prospects entering thefield, given what some see as insufficient college-recruitmentinitiatives and public role models. So while achieving the highestranks in this intensely competitive industry is difficult foreither gender, it seems women are having a harder time.

“There is still a view that it's a bit of the 'Wolf of WallStreet' industry,” said Marie Chandoha, president and chiefexecutive officer of Charles Schwab Investment Management. “Alsothere's a misconception of women thinking they have to be a superquant to be in portfolio management. That may dissuade some fromeven considering” these jobs.

Beating peers

Data show that if women can buck the trends, investors will win.During the past 15 years, actively managed fixed-income funds runby women outperformed the average returns of their respectivesector category by 0.35 percent annually, according to a new studyby Morningstar Inc. This compares with 0.16 percent formixed-gender teams and 0.08 percent for male-only teams.

“Women are in tune with a good deal of what is going on in theeconomy,” said Elaine Stokes, a portfolio manager at Loomis Sayles& Co. with three decades of experience. “The more diversity ofthought you have, the more you can see in the market and the betteryou will perform. We've proven it.”

In 2015, an all-female research team at Morningstar mined datafrom the thousands of equity and fixed-income funds it tracks andfound that less than 10 percent of U.S. managers were women. Theirlatest report indicates the share is about the same now. Nearly allthe new jobs created since 2015 have gone to men, according toLaura Pavlenko Lutton, Morningstar's manager research practiceleader for North America.

“One of the problems women face when they join male-dominatedenvironments is that they struggle to see a path for success,” saidRobin Shanahan, co-chief operating officer at Pacific InvestmentManagement Co. “That's true in asset management,” she said.

For equity funds, the Morningstar report found that femalemanagers' performance was slightly worse than men's. Overall, theinsights from both asset classes led the report's authors, MadisonSargis and Kathryn Wing, to conclude that “the low participationrate of women in the industry is not justified by performance.”

Litmus test

This black and white litmus test of success should be a draw forwomen, as it was for Mary Ellen Stanek, chief investment officer atBaird Funds, the institutional fixed-income investment-managementdivision of Baird.

“Asset management is so objectively measured, harshly so,” shesaid. “Every single day we get a report card, so it's hard toignore if you can put those numbers up. That's one of the greatironies” of the small share of women in the field.

The mission of Girls Who Invest is to help vanquish that irony.The goals for the organization, headed by former North CarolinaTreasurer Janet Cowell, include having women manage 30 percent ofthe world's investable capital by 2030.

“There have to be multiple avenues to get to that aggressivenumber,” Cowell said; one is to increase the pipeline of femaleprospects.

Education push

Girls Who Invest hosts free 10-week summer programs taught bycollege professors for undergraduate women before they're placed inpaid internships with investment firms. The nonprofit also offerscontinuing education online through Coursera and the CFAInstitute.

Stokes — along with contemporaries including Chandoha, Stanekand Gemma Wright-Casparius, who leads four of the 14 women-run debtfunds as senior portfolio manager at Vanguard Group Inc. —succeeded with a mix of grit and a willingness to jump into new,less-established areas.

“Everyone seems to want to turn the dial pretty hard” to changethe industry, so hopefully it won't be so tough for women enteringthe business, Wright-Casparius said.

Chance beginning

Anne Walsh, chief investment officer for fixed income atGuggenheim Partners' asset management unit, says she fell into thefield only by chance, as she didn't have any exposure to it duringundergraduate studies in accounting at Auburn University. Her firstjob was in Alabama's public-pension unit, where she learned aboutall aspects of money management as part of its role in running thestate's retirement plans.

A tenacious work ethnic stoked by her father's militarybackground and the added educational clout of an MBA, law degreeand the CFA designation helped Walsh succeed. And it makes perfectsense to her why fixed-income portfolios with women managers areoutperforming.

Women “approach risk differently than men, and it resonates wellwithin fixed-income asset management,” Walsh said. “So a female-ledteam, or one with female participation in it, tends to balance thatrisk-taking element fairly well.”