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If you want your mutual fund manager to perform like Jerry Maguire and show you the money, you might want to invest with a woman. An analysis of the average annual returns of 2,562 mutual funds run exclusively for MONEY by the fund ratings group Morningstar has produced some eye-opening results. It turns out that funds managed by one woman or a pair of women performed somewhat better over the three years that ended Aug. 31, 1997 than those run by one or two men in each of five broad categories--U.S. diversified stocks (23.29% for women vs. 22.07% for men), international stocks (7.52% vs. 6.02%), taxable bonds (8.33% vs. 8.27%), municipal bonds (6.95% vs. 6.71%) and hybrids, which include domestic stocks and bonds (17.87% vs. 17.23%).

Equally intriguing is the performance of male vs. female fund managers within the U.S. equity fund group. When they are compared, women's three-year average annual returns beat those of men in seven out of the nine categories of U.S. diversified stock funds, including small-company value, mid-cap blend and large-company growth (see the chart on page 26). The performance gap was especially wide between male and female managers of small-company funds. In the small-cap growth category, for example, the seven funds led by women earned an average 24.5% annual return over the past three years vs. 21% for 49 funds run by men.

Granted, in the above cases we are looking at a universe that includes far fewer funds run by women than men. That's because, despite an impressive 500% rise in the number of female portfolio managers over the past 10 years--today there are 464, up from just 77 in 1987--men still outnumber the women 6 to 1. As a result, the Morningstar numbers do not necessarily prove that women are inherently better money managers than men. Rather, says Jessica Bibliowicz, president and COO of the John A. Levin money-management company, "It's a top-of-the-class type of thing. It was probably tougher for these women to get their jobs, so they had to be better to get there.

"Granted, in the above cases we are looking at a universe that includes far fewer funds run by women than men. That's because, despite an impressive 500% rise in the number of female portfolio managers over the past 10 years--today there are 464, up from just 77 in 1987--men still outnumber the women 6 to 1. As a result, the Morningstar numbers do not necessarily prove that women are inherently better money managers than men. Rather, says Jessica Bibliowicz, president and COO of the John A. Levin money-management company, "It's a top-of-the-class type of thing. It was probably tougher for these women to get their jobs, so they had to be better to get there."

You'll have a hard time getting anyone on Wall Street, male or female, to say that women are smarter investors than men. But it is obvious they are gaining respect. In July, Dick Cantor, executive principal at Neuberger & Berman, a 58-year-old Wall Street firm, hired 16-year veteran Jennifer Silver, 40, to run the $600 million Manhattan Fund, a midcap growth fund. That hire was newsworthy since for the first time it tipped scales there in favor of women, who now run four of Neuberger's seven equity funds (see the photo above). Other established mutual fund companies that have a substantial proportion of female fund managers, though not a majority, include Nicholas Applegate, Scudder and Warburg Pincus.

While not going so far as to say men should retire their Bloombergs and leave the stock picking to women, some fund experts say women appear to have a few advantages that may partially explain their superior performance. (To learn why women today are investing more and getting better returns, see our November 1996 special report on women and money.) Specifically, they say that Wall Street women may have it over men in the following three areas:

--They are younger. According to a 1996 study by professors Judith Chevalier at the University of Chicago's Graduate School of Business and Glenn Ellison at the Massachusetts Institute of Technology, younger portfolio managers outperform older ones by an average of 0.86 percentage points for each year of age difference. The reason: Younger managers feel more pressure to perform--or lose their jobs. And since two-thirds of the 464 women who are currently managing portfolios began doing so within the past five years, they make up a relatively young group: The average female fund manager is 42, while the average male fund manager is 46.

--They are better shoppers. Statistics from the National Association of Investors Corporation show that from 1981 through 1996, women-only investing clubs earned a 21.3% average annual return while men-only clubs lagged at 15%. One reason may be that women are savvier consumers. Says Loretta Morris, lead manager of three top-performing funds at Nicholas Applegate: "They make careful decisions, gathering all the information they can. They tend to be more thorough."

--They have excellent management skills. In a 1996 study of 645 male and 270 female managers, Advanced Teamware, a designer of behavioral-assessment software in Agoura Hills, Calif., found that women excelled in 28 out of 31 skills, including listening, maintaining relationships and acting on new ideas. Consequently, says Janet Irwin, a co-author of the study, fund management is a perfect environment for women. "In a business that combines relationship and analytical skills," she says, "women would excel."