What are we looking for?
Good-performing female-led funds and ETFs
The screen
With International Women’s Day just behind us, one can’t help but notice the stark lack of female-led portfolio management in the industry today. Case in point, Morningstar’s U.K. office conducted a short study last year and found that there were actually more registered portfolio managers named “Dave” than there were female managers in the country. Quite a sobering stat. Though Canada’s investment industry is better off Dave-wise, one would still be quite hard-pressed to find a female-led portfolio management team, let alone one with great performance. To this end, today I use Morningstar Direct to screen for well-rated Canadian-domiciled ETFs and mutual funds available through discount brokerages (without embedded commissions) that:
- have a woman listed among the longest-tenured managers on the fund, implying that their presence has significant influence on management decisions;
- have received four- or five-star Morningstar Rating for Funds, indicating that the fund has historically outperformed respective category peers after fees, on a risk-adjusted basis. Our data shows that although the star ratings are backward-looking, funds that have received five stars as a group outperform those that have received four stars, three stars, etc. in periods after receiving the rating. In other words, it’s more likely that a fund manager with a track record of outperforming peers will continue to outperform in the future;
- have received a Morningstar Quantitative Rating of gold, silver or bronze, isolating funds that Morningstar believes will produce excess after-fee returns in the future, based on our analysis of people (quality of the management team), parent (stewardship of the fund company) and process (robustness of investment decision making).
I note here importantly that gender disclosure is not required by Canada-domiciled fund managers in their regulatory filings – and in some cases specific managers’ names are not disclosed in public documents either. As such, this was curated via a manual look through a list of longest-tenured managers, noting the possibility that we didn’t capture all funds in the universe today.
What we found
The ETFs and DIY mutual funds that met the above requirements are listed in the accompanying table, alongside their fees, categories, trailing performance, ratings and inception dates. The list is sorted first on the category, which should provide an indication of what is held in the fund, then by the three-year annualized total return from largest to smallest.
This article does not constitute financial advice. Investors are encouraged to conduct their own independent research before purchasing any of the investments listed here.
Ian Tam, CFA, is director of investment research for Morningstar Canada.
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Ian Tam, CFA