Sex Matters: Gender Bias in the Mutual Fund Industry

Abstract

We document significantly lower inflows into female-managed mutual funds than into male-managed funds. This result is obtained with field data and with data from a laboratory experiment. There are 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 into female-managed funds. Our results suggest that gender bias affects investment decisions and thus offer a new explanation for the low fraction of women in the mutual fund industry.