New tool tracks gender and racial diversity in portfolio management

The Diverse Investing Collective has launched a data dashboard that measures how much money is in the hands of gender-diverse and racially diverse portfolio management teams.

The dashboard examines data from 400 of the largest active, public equity funds. The initial version of the dashboard focuses on gender and a second version that will provide data on race and ethnicity in addition to gender will be released later in 2024.

“For too long, the people designing our financial systems and driving investment decisions have looked the same — and women and people of color have largely been excluded from financial decision-making tables,” said Collective co-founder Ruth Shaber in a release announcing the rollout of the dashboard.

“We know who controls capital matters, and the truth is that very few people know who is managing their money. Improving transparency and accountability are ways for investors to stop leaving money on the table.”

The Diverse Investing Collective was founded by experts in finance and health care, and is guided by a growing coalition of asset owners and allocators and an advisory board from leading investment industry firms. Among its goals: increasing the amount of assets managed by gender-diverse and racially diverse portfolio management teams to 33% by 2033.

While a number of asset management firms have provided diversity data at the firm level, they have not provided it in an easily accessible central database, at the fund level, Shaber said. This means asset owners, allocators, and other organizations cannot easily determine the make-up of individual fund teams making critical investment decisions or how many assets they manage.

“The data we’ve collected shows much of what we already know: women and people of color are not only underrepresented in asset management, but they are also managing smaller amounts of capital,” said Ivy Jack, co-founder of the Collective. “Investors need as much information as possible on individual investment team members in order to evaluate possible sources of cognitive diversity.”

Other key findings from the first dashboard:

• Disclosure of fund team make-up is significantly lacking: 68% of funds are not disclosing gender and racial make-up of teams in a central database.
• Gender-diverse teams manage just 17% of the $6.5 trillion in assets under management examined.
• Portfolio management teams that consist of only men manage close to half of assets under management examined.
• Public mutual fund teams are more gender-diverse than private separately managed accounts.
• Male portfolio managers on average allocate 5.4 times more assets under management than female portfolio managers.

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