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'94/'95 : Words to the Wise : Four Top Money Managers Share Investing Advice

January 02, 1995|KATHY M. KRISTOF

Fund: Women's Equity Mutual Fund

Manager: Linda C.Y. Pei

Assets: $1.2 million

Performance:

Objective: Equity growth by investing in companies that are good to women

Load: 0

12(b)1 fees: 0

Expense ratio: 1.5%

Minimum investment: $1,000

Top holdings: Aetna Life, Bell South, AMR

Phone number: (800) 424-2295

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Few mutual fund managers can honestly say that their investment strategies are a result of their childhood, but for Linda C.Y. Pei, it's a fact.

The founder of Women's Equity Mutual Fund in San Francisco says the pluralism of her youth engendered the concept: She buys companies that are good to their female employees.

To explain, she hearkens back to childhood. Her Chinese parents, who both worked outside the home, maintained that men and women were equal in the workplace, she says. But Pei was raised in Japan, where gender plays a pivotal role in career advancement. Then when she came to the United States in the early 1970s and attended Stanford University's business school, the women's issue was at the forefront of American consciousness. Roughly 10% of her graduating class were women, who were convinced that "if we work hard, we can all make it to the top," Pei says.

Out of school, Pei took a job in banking and returned to Japan. Now, working with senior managers at many major companies, Pei had the opportunity to watch how companies actually operated. She emerged both impressed with the fierce loyalty Japanese men develop for their employers--who treat them like valued members of a team--and disgruntled about the blatant discrimination against women in Japanese society.

"Then, in 1991, I returned to the States. I looked at the statistics and said, 'What happened?' Statistically, the number of women in senior management is the same as it was when I graduated from business school in the '70s," she says.

Instead of criticizing the system, Pei decided that the best way to effect change was to support it with cash. She and a friend pooled their own money and opened Women's Equity Mutual Fund with a simple concept. Find good companies in all industries and then screen them based on their actions and policies related to women.

The idea was simply this: Workers are loyal when they're treated with respect. Loyal workers work harder and try harder to boost company profitability. Roughly 50% of the work force is female. So a company that's good to women, as well as men, is twice as likely to thrive in the long run than one that's not.

The fund has been operating for less than two years, so it's a bit too soon to tell whether this theory will prove true in the long run. But, in a year when more traditional investment approaches brought nothing but losses, Pei's fund is in the positive column. For the 12 months ended Nov. 30, the fund was up 5.85%.

And Pei is optimistic both about the prognosis for her fund and for women in the workplace.

"I am really encouraged," she says. "When I get a chance to go out and meet women and tell them about the fund, the amount of enthusiasm is incredible.

"We have to bring new solutions to today's problems," she adds. "Women bring a different perspective to the problems that companies are now addressing."

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