Sex Matters: Gender Bias in the Mutual Fund Industry

We document significantly lower inflows in female-managed funds than in male-managed funds. This result is obtained with field data and with data from a laboratory experiment. We find no gender differences in performance. Thus, rational statistical discrimination is unlikely to explain the fund flow effect. We conduct an implicit association test and find that subjects with stronger gender bias according to this test invest significantly less in female-managed funds. Our results suggest that gender bias affects investment decisions and thus offer a new potential explanation for the low fraction of women in the mutual fund industry.

The internet appendix is available at https://doi.org/10.1287/mnsc.2017.2939.

This paper was accepted by Lauren Cohen, finance.