Examining the Effect of Gender Leadership and Workforce Equality on Thematic Mutual Funds Financial Performance

Abstract

This study examines the relationship between gender equality scores for leadership and workforce dimension and financial performance of 554 US thematic mutual funds and 2,140 US conventional mutual funds investing globally or in the United States stock markets from January 2015 to May 2021. To this end, we implement the new Fama and French six-factor model and the Student’s t-parametric tests for the independent samples. Our results indicate that, in general, gender equality for leadership and workforce does not affect the financial performance of mutual funds focused on one sector related to sustainable development goals that invest in the United States market. However, we find that infrastructure mutual funds with higher levels of gender leadership and workforce equality that invest in the global market perform better than their counterparts with lower levels of gender equality. On the contrary, healthcare, water, information technology and gold and precious metals mutual funds with higher levels of gender equality for leadership and workforce dimension that invest in the global market underperform their counterparts with lower levels of gender leadership and workforce equality. Similarly, we find a negative relationship between gender equality level for leadership and workforce dimension and the financial performance of mutual funds diversified across sectors such as conventional and ethical mutual funds investing globally or in the United States market.