Women fund managers slightly outperform male colleagues. So where are they?

Do male fund managers outperform their female colleagues? If not, why are women so underrepresented in the fund management industry?

That’s what the authors of a new Morningstar study set out to answer in their “Fund Managers by Gender — Through the Performance Lens” released Thursday.

The number of active equity and fixed-income fund managers has exploded over the last three decades. Since 1990, positions increased almost fivefold to 8,500 from 1,900, according to the study. However, women account for just one-in-nine fund managers in the industry today.

Women-run fund managers performed equally — and in some cases marginally better — than their male counterparts, the study finds. After analyzing actively managed U.S.-based equity and fixed-income funds, men and women deliver equally competitive fund performances, as do mixed-gender teams.

“There needs to be a concerted effort to hire and promote women within firms so women are put in positions of decision making,” says Morningstar analyst and co-author Madison Sargis.

There’s no “persistent difference” in investing outcomes with men over women in terms of fund performance. Meaning, diversity comes with no justifiable downside for clients, the research shows.

Still, women have failed to make significant gains in the industry in terms of representation. While the number of fund manager positions has increased exponentially, that growth has disproportionately benefited men, say researchers. Men have captured nearly all the newly created roles since 1990 — almost 90%.

“In the '90s, women made up 17% of fund manager roles, but now it is just under 11%,” Sargis says. “This is because as the industry has expanded, women haven’t been named to portfolio manager positions at the same pace."

Since women historically come into the industry at the same rate they exit, their representation has fallen as the industry has grown, according to the data.

While the study does not answer why women are underrepresented, it does suggest investors might benefit from more women at the helm. In fact, both equity and fixed-income funds run by female managers slightly outperformed funds run by all-men or mixed-gender groups by a small margin over a 12-month period, the data shows.

In fact, the typical all-women team produced returns that were 41 and 38 basis points higher than average, in equity and fixed-income funds respectively, according to the study.

“So, we see in the data that the women who have become portfolio managers have clearly demonstrated their value,” says Sargis.

“What’s interesting is that measuring the value of a fund manager is very objective,” she says. “Fund managers can point to their track record as evidence of how well they have done. The issue is developing more women earlier so that they can have that track record to point to.”

Morningstar published its initial report in 2015 and found women fund managers continue to be underrepresented compared to other professionals in other sectors, like lawyers and doctors, the firm finds.

So does performance justify a clear shortage of women in the fund management industry?

“In our third and final test,” the authors write, “we can find clear evidence to reject the hypothesis.”