The Impact of Mutual Fund Manager Gender on Investor Capital Allocations

Natalie Borowski, University of Pennsylvania


This study aims to understand whether the gender of mutual fund managers impacts investors’ capital allocation decisions to US mutual funds. This study uses net alpha as an indication of proper capital allocation, as higher net alpha indicates not enough capital, and uses value added (gross alpha multiplied by fund size) as an indication of skill, as higher value added indicates higher skill given that capital is allocated properly (Berk and van Binsbergen 2015). This research utilized the Morningstar database to gather information on 5,000 US mutual funds to compare net alpha and value added between male funds and female funds. The present research found that female managers have statistically significantly higher net alpha and higher value added, compared to male managers, likely indicating that females are not allocated enough capital but have higher skill, as they are able to extract high value added even without proper capital allocation.


Date Posted: 14 September 2017