Girls will be girls: The impact of gender on Active Share

I study the impact of gender on active management by looking at the difference in the Active Share of mutual funds managed by female and male managers. My sample consists of 682 U.S. equity mutual funds that were single-managed by 72 female and 616 male managers from January 2001 to December 2014. I use a combination of random effects panel and logit regressions with controls for fund characteristics, investment style and year effects. I find that on average, female-managed funds have an Active Share 2.87 percentage points lower than their male counterparts. Sorting managers into different active management categories by Active Share and Tracking Error further reveals that women are somewhat more likely to closet index on the margin than men, however, the result is not robust after controlling for fund characteristics or using alternative specifications. Looking at the other extreme of active management, I find that both genders are equally likely to be active stock pickers. Overall, even though female-managed funds on average have lower Active Share, gender does not affect active management in terms of closet indexing and stock picking