Examining the Effect of Gender Leadership and Workforce Equality on Thematic Mutual Funds Financial Performance Carmen-Pilar Martí-Ballester Business Department, Universitat Autònoma de Barcelona, Cerdanyola del Vallès, Spain CarmenPilar.Marti@gmail.com 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. Keywords: thematic mutual funds, financial performance, sustainable development goals, gender equality 1. Introduction Achieving gender equality and women’s empowerment across all sectors related to United Nations Sustainable Development Goals favours an economic growth respectful with the environment (UN Women, 2021; Martí- Ballester, 2020a). This is a leading priority for some investors who demand financial products which promote gender equality and advance the socioeconomic standing of women and girls. Mutual funds could satisfy the preferences of these investors pressing firms in which they invest to adopt gender equality policies if mutual fund managers are able to fulfil their fiduciary duties with prudence. Previous literature has examined the financial performance of mutual funds focused on one specific sector related to sustainable development goals such as energy (Ibikunle and Steffen, 2017; Reboredo et al., 2017; Martí-Ballester, 2019a, 2019b; Naqvi et al., 2021), water (Álvarez and Rodríguez, 2015; Ibikunle and Martí- Ballester, 2020), healthcare (Martí-Ballester, 2020b), green (Climent and Soriano, 2011; Silva and Cortez, 2016) or social (Ielasi et al., 2019; Lesser et al., 2016; Badia et al., 2021), reaching different findings, indicating that thematic mutual fund financial performance could be led by sector in which mutual funds invest (Martí-Ballester, 2021; Jin and Han, 2018). However, the effect that gender equality level achieved by firms in which mutual funds invest has on the financial performance of their portfolios has received little attention despite the importance of ending all discrimination against women and girls have to economic growth and sustainable development. Specifically, Chapple and Humphrey (2014) compare the financial performance of portfolios integrated by Australian firms with gender-diverse boards to that of portfolios composed of firms without gender diversity on boards, and find a positive correlation between diversity and performance of portfolios investing only in basic materials or consumer goods industries but no evidence of this relationship for portfolios investing in other industries. Extending this research line, this study examines the relationship between gender leadership and workforce equality and fund financial performance by sector related to one sustainable development goal for the United States market. 2. Literature review and hypothesis development The board of directors plays an important role in corporate governance process. They are responsible for supervising firm management to safeguard the interests of shareholders, provide advice and counsel to managers, monitor legal compliance and link corporations to the external environment. The fulfilment of these duties could be influenced by the participation of women on the corporate board, allowing firms to enhance their organizational efficiency, legitimacy and reputation, and consequently, to improve their financial performance according to several theoretical arguments (Fama and Jensen, 1983; Carter et al., 2010; Provasi 139 Proceedings of the 5th International Conference on Gender Research, 2022