Parnassus Core Equity Fund

Scorecard
4 / 5 Stars
Lipper
5 5 5 4 4
Zacks Investment Research
4 (Sell)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A+ (Buy)

U.S. News evaluated 481 Large Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 27.21 percent over the past year, 18.46 percent over the past three years, 18.45 percent over the past five years, and 10.48 percent over the past decade. 

Trailing Returns Updated 06.30.2014
Year to date 8.4%
1 Year 27.2%
3 Years (Annualized) 18.5%
5 Years (Annualized) 18.5%
10 Years (Annualized) 10.5%

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Summary

Parnassus Equity Income has shown that socially responsible investing doesn't need to involve trade-offs.  

As of July 03, 2014, the fund has assets totaling almost $9.70 billion invested in 42 different holdings. Its portfolio consists of shares of companies that span the market-capitalization spectrum.  

A commonly held belief is that socially responsible funds start at a disadvantage. After all, since the funds necessarily screen out companies that don't match their values, they have a smaller universe from which to pick attractive stocks. But that hasn't stopped Parnassus Equity Income from posting top-notch returns. After a solid 2009, the fund slowed down quite a bit last year. In particular, Microsoft, which enjoys a prominent place in the fund's portfolio, was a disappointment, while a number of the fund's other top holdings had mediocre years. All told, management runs a very compact portfolio, which at the end of November consisted of just 41 names. That means that when even a couple of the fund's picks struggle, investors are sure to feel the pain. Still, as of the end of 2010, the fund's trailing three-year returns were good enough to land it in the top 3 percent of Morningstar's large-blend category. The fund has returned 27.21 percent over the past year and 18.46 percent over the past three years. 

Todd Ahlsten manages the fund. He looks for companies that pass the fund's social screens, and over time he's shown a penchant for finding winners. To be sure, the fund has had occasional off years, but its long-term numbers are nonetheless hard to argue with. The fund has returned 18.45 percent over the past five years and 10.48 percent over the past decade.

Investment Strategy

Management likes companies with strong balance sheets and shows a strong preference for dividend-paying stocks. Like the rest of the Parnassus funds, this one screens out companies from the alcohol, tobacco, gambling, and weapons-contracting industries, as well as companies that generate electricity from nuclear power. For the most part, the fund's screening process has had a neutral effect on its performance.

Role in Portfolio

Morningstar calls this a "core" holding.

Management

Todd Ahlsten manages the fund.

Fees

Parnassus Core Equity Fund has an expense ratio of 0.69 percent.  

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Risk

Like all stock funds, this one comes with some risks.  

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See Also:

Top Parnassus Funds