With so many new mutual funds being started each year, it would seem logical that someone would start one aimed specifically at a group that makes up more than half the population: women.
Yet the Libra Fund, which opened for business April 2, seems to have found it as easy to attract controversy as money. It has raised less than $2 million thus far, so the fund hasn't even begun investing in stocks yet, but it has already been the target of criticism for being ''sexist,'' for ''talking down'' to women , and for using a ''marketing gimmick'' to attract money from unsophisticated women investors.
But the fund has also helped raise the issue of how good a job the mutual fund industry does of selling its products to less-experienced investors - men or women.
''I would say that the whole financial industry has shot over the heads of many women'' with its marketing, said Mary Malgoire, a financial planner in Washington. ''And it's not only women. I see economists who don't understand their personal finances.'' Most fund advertising is ''mainly aimed at men with experience in investments,'' she charges.
Trying to meet this problem was part of the reason for the Libra Fund, says Michael Schaenen, president of Somerset Capital Management Inc., the New York investment firm that started the fund.
Mr. Schaenen said planning for the fund began after information came in from 18 ''focus'' groups where women were asked questions about investments, including their goals, various industries, and their reactions to how these industries approached women.
''It confimed our visceral feeling that there was a need for a product addressed to women,'' he said. ''We heard over and over again that women don't like dealing with brokerage firms. They get intimidated by the whole Wall Street scene. . . . Women said other funds talked down to them and they felt intimidated about not having any experience in investments.''
This has also been used by critics of the Libra Fund concept, who feel the fund's advertising talks down to women, a group that may not need this kind of special attention.
''I don't know that women think of themselves as a distinct group,'' said Michael Lipper, president of Lipper Analytical Services, which keeps performance records on mutual funds. ''I think they think of themselves as investors, rather than a biological set.
''Whether there is a (mutual fund) market for women who don't know anything about investments is questionable.'' Marketing a fund toward ''women as women,'' Lipper says, rather than ''women as investors,'' almost ensures that it will be confined to a very limited audience.
Schaenen noted, however, that he has been hearing from men, too. It is illegal, he pointed out, for any fund to discriminate against any group of people, including men or women. So while women are the main target, men are welcome, too. So far, Schaenen said, about a third of the inquiries to the fund have come from men. The only difference here, he added, is that men are more likely to seek additional information about the fund through the toll-free telephone line, while women seem to prefer to write or send in coupons from the ads.
Still, he says, it is too early to tell how any of these inquiries will translate into investments. Even though there are actually two Libra Funds - a money maret fund and an equity fund aiming for long-term capital appreciation - both have been hit by the recent slowdown in the stock market.
Schaenen admits that because Libra is so new, one of the most important gauges for selecting a mutual fund - long-term performance - is missing.
''If the criterion is what kind of track record we have as a mutual fund, clearly we don't qualify,'' Schaenen says. But, he notes, several mutual funds have been started by investment firms like his, a company he believes has a good record. For the last five years, Somerset Capital Management, a 50-percent-owned subsidiary of Schaenen Jacobs Etheredge & Co., has posted a 22-percent annual return on its investments. It is currently managing about $60 million for corporate pension accounts and upper-income individuals.
An indication of the kind of stocks the Libra Fund might invest in can be seen in the portfolio of Somerset Capital. They include Bassett Furniture, General Electric, money-center banks like Morgan Guaranty Trust, and Masco, a company that makes faucets and oil-field equipment. Neither these nor any other stocks will show up in the Libra portfolio until the fund has pulled in at least companies.
Schaenen knows that many investors may prefer to wait until the Libra Funds have a few years' performance record under their belts, and that capital appreciation funds have not been doing well in this hesitant stock market. But he still thinks a fund that can explain to novice investors what it and the rest of the industry are doing will eventually gain a following - and perhaps some imitators.
''But the first one out there will have the edge,'' he says, hopefully.