How different are minority managers from White managers in the mutual fund industry?

Abstract

This study investigates manager characteristics and performance differences between minority (Asian, Black, Hispanic Latino) and White managers in the mutual fund industry. We find that racial representation varies dramatically among different types of funds. While we demonstrate systematic differences in manager- and fund-level characteristics between minority and White managers, we find that minority managers have higher fund flows and no significant difference in fund returns. The findings suggest that diversity variation in the mutual fund industry is unlikely due to performance differences. • The racial representation of mutual fund managers varies dramatically among different types of funds. • Systematic differences exist in manager- and fund-level characteristics between minority and White managers. • Minority managers have higher fund flows and no significant differences in fund returns. • Racial diversity variation in the mutual fund industry is unlikely due to performance differences.