Should we choose male or female fund managers? : Evidences from the Chinese mutual fund market

Abstract

This paper extends the study of the female role in corporate governance to the area of mutual fund management. It looks into whether a gender difference exists in the risk taking behaviour and investment performance of mutual fund managers in China. Using data from the Chinese mutual fund market and stock market, the paper finds that within this professional group, even after controlling for the level of knowledge, female fund managers still invest less in stocks and more in bonds. With respect to their stock holdings, female fund managers tend to choose stocks with lower systematic risks. In addition, female fund managers will diversify their stock holdings more than do their male counterparts. These results may suggest that a greater risk aversion does exist among women in the professional group. Surprisingly, however, female-managed funds do not under-perform male-managed funds. A possible explanation may be found in studies of the female director’s role in improving monitoring quality. Female fund managers may improve the risk control process in a fund management team by their diligence and independent thinking, which results in a better fund performance.