Making money shamelessly

Andrew Leckey

August 14, 1991|By Andrew Leckey | Andrew Leckey,Tribune Media Services

Virtue has been rewarding to Parnassus Fund investors this year.

That San Francisco-based fund gained 36.17 percent in the first half of 1991, topping the nation's so-called "socially responsible" stock mutual funds. Parnassus was down 20 percent last year, due mostly to weakness in the small- to medium-capitalization stocks it emphasizes.

This fund managed by Jerome Dodson abstains from investing in companies that manufacture tobacco or alcohol, are in the gambling business, have dealings with South Africa or are weapons contractors.

Dodson favors consumer-oriented firms that are good places at which to work. He likes to see them active in charitable organizations and their communities. Unique projects gain his interest. But, of course, they also must have good investment potential. The fund, whose investment strategy emphasizes the out-of-favor equities likely to rebound, definitely seeks to make money for its investors.

"We do extensive interviews with company management and examine all material on a company before we decide to exclude or include it," explained Dodson. "This year, as small- to medium-capitalization stocks have bounced back, we're also in a positive cycle."

Shining investment stars for Parnassus have been Magna International, Baldor Electric, Wellman Inc. and Raymond Corp. Recent additions include Houghton Mifflin, Groundwater Technology, Mentor Graphics and Lillian Vernon.

"We find that firms with good employee relations, good environmental protection records and fine occupational safety records tend to be well-managed," observed Diane Coffey, investment officer with Dreyfus Third Century Fund, up 18.17 percent this year. "Our primary goal is to provide investors with solid financial returns while giving them the opportunity to make a socially conscious investment."

Besides deeming tobacco unacceptable, Dreyfus Third Century avoids companies either operating directly in South Africa or with 10 percent indirect operation in that country. Its favorite holdings currently include Medco Containment Services.

"Companies that are socially progressive tend to encounter fewer difficulties with employees and special interest groups and are more productive," added Domenic Colasacco, portfolio manager for Calvert Social Investment Equity Fund, up 11.40 percent, and Calvert Social Investment Management Growth Fund, up 6.27 percent. Big holdings include J.M. Smucker, Albertson's Inc. and W.W. Grainger. Giant Food was recently added.

Top-performing socially responsible mutual funds in 1991, according to Mutual Fund Values, have been:

Parnassus Fund, San Francisco; 3.5 percent "load" (initial sales charge); $2,000 minimum initial investment; up 36.17 percent.

Calvert-Ariel Growth Fund, Washington, D.C.; 4.75 percent load; closed to new investors; up 20.36 percent.

Dreyfus Third Century Fund, Uniondale, N.Y.; no load; $2,500 minimum; up 18.17 percent.

Rightime Social Awareness Fund, Wyncote, Pa.; 4.75 percent load; $2,000 minimum; up 14.19 percent.

Calvert Social Investment Equity Fund, Washington, D.C.; 4.75 percent load; $1,000 minimum; up 11.40 percent.

Pax World, Portsmouth, N.H.; no load; $250 minimum; up 9.8 percent.

Calvert Social Investment Management Growth Fund, Washington, D.C.; 4.75 percent load; $1,000 minimum; up 6.27 percent.

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