Trading on Gender Heterogeneity in Analyst Recommendations: A Profitable Investment Strategy?

Abstract

Using analysts' stock recommendations this paper shows gender heterogeneity in investment advice. The odds for female financial analysts to issue optimistic recommendations are much lower than the odds for male analysts. However, an investor cannot profit from the observed gender differences. Comparing monthly rebalanced portfolios of stocks recommended by female analysts and by male analysts, we conclude that the investor can not convert the observed gender differences in recommendations into a profitable investment strategy.

Keywords: financial analysts, recommendations, gender, portfolio investment

JEL Classification: G11, G14, G24, J44