Sallie Krawcheck has long preached the financial benefits of gender diversity in Corporate America.
The former Wall Street executive is now putting her money where her mouth is.
On Wednesday, Krawcheck took a major stake in the first and only mutual fund in the U.S. that focuses on investing in companies with strong track records for advancing female leadership.
"While gender diversity is a nice-to-do, I have become convinced that gender diversity is also a smart-to-do ... and an under-appreciated driver of superior company performance," Krawcheck wrote in a LinkedIn Influencer post titled "Investing 2.0: A Modern Way to Invest."
The new fund, dubbed the Pax Ellevate Global Women's Index Fund, seeks to measure and capture the contribution of gender diversity to business success. It will replace the Pax World Global Women's Equality Fund (PXWEX).
Thirty-one percent of the board seats and 24% of executive management positions of the companies in the new fund are held by women, compared with a global average of just 11% for each. All of the companies in the fund have at least one woman on their board and 97% have at least two.
Krawcheck pointed to research that indicates diverse leadership teams suffer less groupthink, generate higher returns on equity, focus more on clients, enjoy greater innovation and feature lower gender pay disparities.
Yet "progress on gender diversity in corporate America has actually stalled ... and in the financial services industry we've gone backward," said Krawcheck, who previously served as chief financial officer of Citigroup (C) and head of Bank of America's (BAC) Merrill Lynch division.
Krawcheck recently told CNN Money that Wall Street went into the crisis, "white, male and middle aged" and came out "whiter, male-er and middle age-er."
In an effort to fix this issue, Krawcheck has invested in the Ellevate global professional women's network, which sports 34,000 members and was formerly named 85 Broads.
There are some on Wall Street who don't think that socially conscious investing can be profitable.
Krawcheck even joked: "Isn't impact investing about eating a lot of granola and hugging a bunch of trees?"
But she believes the next wave of investors "seek to earn a fair return AND express their values."
Sallie Krawcheck was one of the most powerful women on Wall Street before she left her job as president of wealth management at Bank of America (BAC) in 2009.
These days she's helping to promote diversity in finance through a network of 30,000 female professionals, known as 85 Broads. (Krawcheck plans to change the name, which refers to the address of Goldman Sachs' former headquarters.)
Speaking at an event hosted by the MOREBen Rooney - May 9, 2014 11:18 AM ET
Not a member yet?Sign up now for a free account
|Adult dating site hack exposes sexual secrets|
|Couple leaves $850,000 estate to U.S. government|
|Your clothes are killing us|
|China's richest man bet his company's shares would fall|
|Sarah Krauss launched S'well to rid the world of plastic water bottles|