Fortune

WHEN THE BEST WORKPLACES ARE THE BEST INVESTMENTS

ONE OF THE TOP-PERFORMING MUTUAL FUNDS OF THE PAST 10 YEARS HAS A REMARKABLE DISTINCTION: ITS MANAGER BASES HIS STOCK PICKS ON THE 100 BEST COMPANIES TO WORK FOR LIST. HERE’S HOW PARNASSUS ENDEAVOR WORKS—AND WHY IT SUCCEEDS.

FOR MOST OF HIS first two decades as a mutual fund manager, Jerry Dodson was something of a nobody in finance. The Warren Buffett–quoting stock picker had set up shop in San Francisco in 1984 to practice “socially responsible” investing, partly inspired by the anti-apartheid movement that called for divestment from South Africa. Even as his firm, Parnassus Investments, racked up some impressive returns, he maintained a reputation as a hippie do-gooder and, at worst, a kook.

Among his more outlandish hunches was that treating workers well could pay off for companies in the form of better stock returns. “I had no evidence,” he remembers. “Intuitively I thought it would work, but I had no idea.” But shortly after the new millennium, Dodson received a phone call that gave him the proof he needed. Milton Moskowitz,

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