Gender and Mutual Fund Liquidity

We examine whether US mutual funds managed by females have a higher portfolio liquidity than those of their male counterparts. Single female managers’ holdings are 8–25% more liquid than those of single‐male‐managed funds. When there is a transition from a male to a female manager, fund holdings liquidity increases compared with a male to male transition. The findings are consistent with the risk‐averse and conservative decision‐making behaviour of female managers. We do not find evidence to support the excessive trading hypothesis that predicts a higher portfolio liquidity for overconfident male fund managers. Our findings add to growing evidence that gender affects professionals’ investment choices.