The Gender Composition of Firms and Risk-Taking Behavior: Evidence from Mutual Funds

27 Pages Posted: 24 Aug 2018

See all articles by Cristian L. Dezso

Cristian L. Dezso

University of Maryland - R.H. Smith School of Business

Evan Rawley

University of Minnesota - Twin Cities - Carlson School of Management

David Gaddis Ross

University of Florida

Date Written: August 14, 2018

Abstract

We use two decades of data on more than 20,000 mutual fund manager spells and find that, in contrast to existing evidence, the presence of female fund managers is associated with more risk-taking, by other managers in the same family of funds. Male and, especially, female fund managers take on significantly more idiosyncratic risk — a measure of a fund manager’s unique investment style — and their funds exhibit a higher market beta — a measure of the non-diversifiable risk to which a fund’s investors are subject — when they have a higher proportion of female fund manager colleagues. Our results are consistent with a “safe haven” effect, whereby the presence of female managers encourages their colleagues to express their investing individuality by taking on more risk. We also find that risk-adjusted performance does not change, suggesting that the safe haven effect operates along an efficient frontier.

Keywords: gender, risk, mutual funds

Suggested Citation

Dezso, Cristian L. and Rawley, Evan and Ross, David Gaddis, The Gender Composition of Firms and Risk-Taking Behavior: Evidence from Mutual Funds (August 14, 2018). Available at SSRN: https://ssrn.com/abstract=3231460 or http://dx.doi.org/10.2139/ssrn.3231460

Cristian L. Dezso

University of Maryland - R.H. Smith School of Business ( email )

Van Munching Hall
College Park, MD 20742
United States
301-405-7832 (Phone)

HOME PAGE: http://www.rhsmith.umd.edu/lbpp/faculty/deszo.html

Evan Rawley

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

David Gaddis Ross (Contact Author)

University of Florida ( email )

PO Box 117165, 201 Stuzin Hall
Gainesville, FL 32610-0496
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
122
Abstract Views
821
rank
253,806
PlumX Metrics