As outlined in this month’s cover story, returning to work after an extended career break can be challenging for anybody – not just those working in asset management. However, there is one particular nuance of this sector which others don’t necessarily come up against – a performance track record.
Funds are often selected for their longterm total returns. According to the ICI Annual Mutual Fund Shareholder Tracking Survey, 90% of retail investors cited past returns as a consideration when selecting funds, with 40% of these stating this was ‘very important’ in their decision-making.
But if a manager leaves the helm of their portfolio for any period of time, this becomes impacted – there is nothing, as of yet, to protect a manager’s track record in these circumstances.
Given performance data is a numbersbased game, it can mean that even the most basic performance filters can disqualify funds where the manager has taken some time away from the desk – either because it cuts the length of their track record, or weighs on the long-term total returns.
In this month’s cover story (page 24), Alexandra Jackson, who manages the Rathbone UK Opportunities fund, tells Portfolio Adviser: “We need a plan so that those taking parental leave can maintain their track record … If your body of work pre-parental leave can be maintained, there is much more incentive to return to work.”
It would have seemed intuitive for this to account for a larger proportion of Portfolio Adviser’s cover story, but frankly, there is very little data available.
According to numbers from Morningstar last year, there are 184 female fund managers running 329 mandates between them – accounting for 17.8% of UK-domiciled funds in total.
However, only 77 of these 329 funds (23.4%) have a woman as their lead or sole fund manager. This sounds bad – and in some ways it is – but the view of many diversity, equality and inclusion advocates is that fund management should indeed be collegiate and team based, so performance track records should be maintained until the manager returns.
But until then, what happens for these 77 sole fund managers – or, any other lead fund managers who take an extended period of leave? Perhaps this is another nail in the coffin for the concept of a ‘star fund manager’, as the industry continues on its path towards inclusivity.