Advice From All-Star Women Fund Managers

Of the 25 funds in the Kiplinger 25, a number have women managers. I interviewed several of them, and in addition to the stellar performance of their funds, these women have a lot in common. They all took the initiative to get a foot in the door, benefited from the encouragement of male mentors, have fulfilling family lives and offer similar investment advice for women.

Lori Keith, who manages Parnassus Mid Cap with Matt Gershuny, received a baptism by fire when she became manager in October 2008 and the market tanked during her first quarter on the job. “We were down a lot less than the market because we stuck to our strategy: focusing on high-quality companies with a competitive advantage so they can endure over a full market cycle,” says Keith. One favorite now: Fortive, an industrial-products firm spun off from Danaher last year.

One characteristic of Keith’s fund is perseverance (“We hold companies for at least three years and often much longer”), a trait she learned by studying classical piano in her youth. She was attracted to Parnassus because of its emphasis on social responsibility, and she credits an internship at the firm with helping her land a full-time position.

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Asset management is a “fantastic” field for women, she says, because it’s “challenging, intellectually stimulating and impactful.” But it can be tough to break into the business because, unlike consulting firms, it doesn’t have large classes of new entrants each year. And for women, says Keith, it’s important to be at a “culturally friendly” firm that allows you to have both a family—she’s married, with three children—and a long career. “The burden is on those of us in the industry to cultivate a pipeline.”

Diana Strandberg is part of the eight-person team that manages Dodge & Cox Stock. With the company’s team approach, women make up 33% of members on its investment-policy committees—the highest percentage in the industry, says CEO Dana Emery. The team approach also provided support for Stock in 2015, when the fund’s emphasis on energy and financial stocks hurt returns, and paved the way for a big snapback in 2016, when the fund gained 21.3%. The fund is still bullish on financials; its top four holdings are Bank of America, Wells Fargo, Capital One and Charles Schwab.

Strandberg and Emery have been at the firm for decades—between them they have five adult sons—another example of choosing a company with a culture that aligns with your values. At Dodge & Cox, says Emery, “we’re looking for people who thrive on debate and are resilient—more of a personality issue than gender.”Strandberg’s advice for young women: Raise your hand to jump into projects even when you don’t feel 100% ready. And stay flexible. “Many more doors may be open to you than you imagined.”

Jean Hynes manages Vanguard Health Care, which has been caught squarely in the middle of the political debate over health insurance and pharma­ceutical pricing. From her perspective of 20 years analyzing the health care market, Hynes thinks some parts of the Affordable Care Act will be repealed but that the entire law won’t be dismantled—in her words, “repeal, replace, repair, rebrand.” She is excited about prospects for innovative treatments of complex diseases that affect a small number of patients, and she is optimistic that we’ll be able to figure out ways to pay for them.

Like Keith, Hynes says an internship--in her case, with a brokerage firm--got her interested in the business. She joined Wellington, which manages Vanguard Health Care, in 1991, and 26 years later, she says, “I love it as much as I did then.” She credits former fund manager Ed Owens, who was “gender-blind,” with “allowing me to learn how to take risks and make mistakes.” A mother of four teenage daughters, Hynes says she loves “telling young mothers that if you love your job, your children will know that and it will make the juggling act more achievable.”

As for investment advice, all four women agree: Think long term. Says Emery, “Women tend to want more stability in their investments, but they probably need to own more stocks.”