Parnassus Mid Cap Fund – Fund Fact Sheet as of December 31, 2015
Parnassus Investments
Description
Parnassus Mid Cap Fund
OVERALL MORNINGSTAR RATINGTM
SM
ï‚«ï‚«ï‚«ï‚«ï‚«
Fourth Quarter 2015
All information, unless otherwise indicated, is as of 12/31/2015
Objective
Overall rating out of 389 Mid-Cap Blend funds as of
12/31/2015.
Total % Returns
3 Months
YTD
1 Year
3 Years
5 Years
10 Years
Since
Inception
4/29/05
Parnassus Mid Cap Fund--Investor Shares
5.04
-0.87
-0.87
12.25
11.63
8.84
8.59
NA
1.09
0.99
Parnassus Mid Cap Fund--Institutional Shares
5.07
-0.65
-0.65
12.33
11.68
8.87
NA
-1.30
0.94
0.85
Russell Midcap Index
3.62
-2.44
-2.44
14.18
11.44
8.00
9.03
NA
NA
NA
Capital appreciation
As of 12/31/2015
Strategy
The Parnassus Mid Cap Fund invests with low turnover and high conviction
in approximately 40 holdings. The Fund seeks to invest in companies with:
• Wide moats or strong competitive advantages that protect
market share and profitability
• Relevancy over the long term, which provides a
compounding growth component
• Quality management teams that will act in the best interest
of shareholders
• Favorable three-year investment horizon
Annual % Returns
Parnassus Mid Cap Fund - Investor Shares
Russell Midcap Index
At Parnassus Investments, the investment team follows a responsible
investment approach to understand the full impact of a company. The
investment team carefully considers a company’s environmental, social
and governance (ESG) factors. By incorporating ESG factors into the
fundamental investment process, the investment team often identifies
risks and opportunities that the market may have ignored and could impact
the performance of investments.
For each fund with at least a three-year history, Morningstar calculates a Morningstar
RatingTM based on a Morningstar risk-adjusted return measure that accounts for
variation in a fund’s monthly performance (including the effects of sales charges,
loads, and redemption fees, unless otherwise indicated), placing more emphasis on
downward variations and rewarding consistent performance.
The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and is rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating metrics. The Fund was rated against the following numbers of U.S. - domiciled Mid-Cap Blend funds over the following time periods: 389 in the last 3 years, 323 in the last 5 years and 211 in the last 10 years.
With respect to these Mid-Cap Blend funds, the Fund received Net Expense Ratio (a) 36.26 40.48 30% 15.78 15.26 10% 1.81 5.60 -29.38 -41.46 18.70 25.48 3.33 -1.55 18.58 17.28 28.27 34.76 Annual Growth of $10,0001 Parnassus Mid Cap Fund - Investor Shares Russell Midcap Index 27,500 11.24 13.22 25,000 $23,328 22,500 -0.87 -2.44 20,000 $21,589 17,500 -10% 15,000 -30% ESG Integration Gross Expense Ratio (a) All returns greater than one year are annualized. (a) As described in the Fund’s current prospectus dated May 1, 2015, Parnassus Investments has contractually agreed to limit total operating expenses to 0.99% of net assets for the Parnassus Mid Cap Fund—Investor Shares and 0.85% for the Parnassus Mid Cap Fund—Institutional Shares. This agreement will not be terminated prior to May 1, 2017, and may be continued indefinitely by the Adviser on a year-to-year basis. Performance shown prior to April 30, 2015 (the inception of the Institutional Shares), reflects the performance of the Parnassus Mid Cap Fund—Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. 50% The Fund strives to outperform the Russell Mid Cap Index over the longrun on a risk-adjusted basis with a high active share.
The Fund attempts to shield investors from losses during bear markets, while offering significant upside participation during bull markets. Since Inception 4/30/15 12,500 10,000 -50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 7,500 2015 Ten Largest Holdings2 First Horizon National Corp. .................................................... 3.8% Cardinal Health Inc. ................................................................. 3.5% Xylem Inc. .................................................................................
3.4% Applied Materials Inc. ............................................................. 3.4% SEI Investments Co. ................................................................. 3.4% Patterson Companies Inc. ........................................................
3.2% DENTSPLY International Inc. ................................................... 3.2% Pentair plc ................................................................................. 3.2% Sysco Corp. ...............................................................................
3.1% Fiserv Inc. .................................................................................. 3.1% Total........................................................................................ 33.3% a Morningstar Rating of 3, 5 and 5 stars for the 3-, 5- and 10-year periods, respectively. Other classes may have different performance characteristics.
Past performance is no guarantee of future results. 1 The chart shows the growth of a hypothetical $10,000 investment since inception date and does not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. 2 Percent based on total net assets of date indicated. 3 Excluding cash and cash equivalents. Performance data quoted represents past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted, and most recent month end performance is available on the Parnassus website (www.parnassus.com). Investment return and principal will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original principal cost.
The Russell Midcap Index is a widely recognized index of common stock 2006 2007 2008 2009 Sector Weightings3 Consumer Discretionary Consumer Staples Energy Utilities Financials Health Care Industrials Materials Information Technology Telecom Services 2010 2011 2012 2013 2014 Parnassus Mid Cap Fund Russell Midcap Index 4% 4% 5% 16% 6% 6% 10% 6% 15% 10% 9% 6% 0% 1% 2015 16% 23% 21% 13% 14% 15% prices. An individual cannot invest directly in an index. An index reflects no deductions for fees, expenses or taxes.
Returns shown for the fund do not reflect the declaration of taxes a shareholder would pay on the fund distributions or the redemption of fund shares. The Parnassus Funds are underwritten and distributed by Parnassus Funds Distributor, a subsidiary of Parnassus Investments and a FINRA member. Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of the fund and should carefully read the prospectus or summary prospectus, which contain this information. A prospectus or summary prospectus can be obtained on the website, www. parnassus.com, or by calling (800) 999-3505. PARNASSUS INVESTMENTS® . Parnassus Mid Cap Fund SM Fourth Quarter 2015 All information, unless otherwise indicated, is as of 12/31/2015 Portfolio Managers Fund Characteristics Fund Russell Midcap Index Matthew D. Gershuny Ave Weighted Mkt Cap ($Bn) $12.6 $12.2 P/E Ratio 23.2x P/B Ratio • Director of Research, Portfolio Manager • With firm since 2006 • Investment industry since 1997 • Portfolio Manager since 2008 • M.B.A., Michigan University 2006 • B.A., Philosophy, Cornell University 1995 Lori A. Keith • Portfolio Manager, Senior Research Analyst • With firm since 2005 • Investment industry since 1994 • Portfolio Manager since 2008 • M.B.A., Harvard Business School 2000 • B.A., Economics, University of California, Los Angeles 1989 Number of Holdings Portfolio Turnover (2015 Annual) Fund Facts Investor Shares Institutional Shares Ticker PARMX PFPMX 19.9x CUSIP 701765885 701765505 3.0x 2.3x Minimum Investment $2,000 $100,000 42 831 Gross Expense Ratio 1.09% 0.94% 58.0% - Net Expense Ratio 0.99% 0.85% 4/29/2005 4/30/2015 Average Weighted Market Cap is the average capitalization of all stocks in the portfolio, weighted by each holding’s size in the portfolio. Price/Earnings (P/E) Ratio is a ratio of a stock’s current price to its per-share earnings over the past 12 months (or “trailing” 12 months).
Price/Book (P/B) Ratio is the ratio of a stock’s latest closing price divided by its book value per share. Inception Date Distribution Frequency Annually Total Net Assets $554.6MM E xpenses based on total net assets, net of reimbursement. As described in the Fund’s current prospectus dated May 1, 2015, Parnassus Investments has contractually agreed to limit total operating expenses to 0.99% of net assets for the Parnassus Mid Cap Fund—Investor Shares and to 0.85% of net assets for the Parnassus Mid Cap Fund— Institutional Shares. This agreement will not be terminated prior to May 1, 2017, and may be continued indefinitely by the Adviser on a year-to-year basis. Firm Overview Parnassus Investments® is an independent and employee-owned investment management company based in San Francisco, CA. Founded in 1984, the firm seeks to invest in businesses that have increasingly relevant products or services, sustainable competitive advantages, quality management teams and ethical business practices.
We believe the most attractive opportunities for investments are when companies with good business fundamentals become temporarily undervalued due to market sentiment. Fund Statistics (5 Year) Alpha 1.71% - Beta 0.86 1.00 R-Squared 0.91 1.00 Sharpe Ratio 1.00 0.88 11.68% 13.05% Downside Risk 6.80% 3.94% - Active Share 95.12% Style 7.64% Tracking Error Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha.
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1.00 means that the share price moves exactly in line with the market. A beta over 1.00 suggests that the share price will typically be more volatile than the market, and conversely, a beta below 1.00 indicates that the share price will typically be less volatile than the market.
R-Squared is a measurement of how closely the portfolio’s performance correlates with the performance of a benchmark index such as the Russell Midcap Index. Standard Deviation is a calculation used to measure Russell Midcap Index Standard Deviation Total Assets Under Management: $15.6 billion Investor Shares - variability (risk) of a portfolio’s performance. Sharpe Ratio is a ratio used to measure risk-adjusted performance.
It is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns. Downside Risk is a statistical measurement of a portfolio’s dispersion below the mean return of a benchmark. Tracking Error is the standard deviation of the difference between the portfolio return and the desired investment benchmark return.
Active Share measures the percentage amount your portfolio differs from a passive benchmark. Risks: The Fund’s share price may change daily based on the value of its security holdings. Stock markets can be volatile, and stock values fluctuate in response to the asset levels of individual companies and in response to general U.S. and international market and Parnassus Funds’ equity style box is based on the portfolio’s overall targeted capitalization range and relative valuation. Large Cap Mid Cap Lipper Category: Mid-Cap Core Small Cap Value Core Growth economic conditions.
Security holdings in the fund can vary significantly from broad market indexes. The Fund invests in the stocks of small and mid-cap companies, which are generally riskier than larger companies, and the Fund’s share price may be more volatile than funds that invest in larger companies. PARNASSUS INVESTMENTS® 1 Market Street, Suite 1600 San Francisco, CA 94105 www.parnassus.com (800) 999-3505 .
The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and is rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating metrics. The Fund was rated against the following numbers of U.S. - domiciled Mid-Cap Blend funds over the following time periods: 389 in the last 3 years, 323 in the last 5 years and 211 in the last 10 years.
With respect to these Mid-Cap Blend funds, the Fund received Net Expense Ratio (a) 36.26 40.48 30% 15.78 15.26 10% 1.81 5.60 -29.38 -41.46 18.70 25.48 3.33 -1.55 18.58 17.28 28.27 34.76 Annual Growth of $10,0001 Parnassus Mid Cap Fund - Investor Shares Russell Midcap Index 27,500 11.24 13.22 25,000 $23,328 22,500 -0.87 -2.44 20,000 $21,589 17,500 -10% 15,000 -30% ESG Integration Gross Expense Ratio (a) All returns greater than one year are annualized. (a) As described in the Fund’s current prospectus dated May 1, 2015, Parnassus Investments has contractually agreed to limit total operating expenses to 0.99% of net assets for the Parnassus Mid Cap Fund—Investor Shares and 0.85% for the Parnassus Mid Cap Fund—Institutional Shares. This agreement will not be terminated prior to May 1, 2017, and may be continued indefinitely by the Adviser on a year-to-year basis. Performance shown prior to April 30, 2015 (the inception of the Institutional Shares), reflects the performance of the Parnassus Mid Cap Fund—Investor Shares and includes expenses that are not applicable to and are higher than those of the Institutional Shares. 50% The Fund strives to outperform the Russell Mid Cap Index over the longrun on a risk-adjusted basis with a high active share.
The Fund attempts to shield investors from losses during bear markets, while offering significant upside participation during bull markets. Since Inception 4/30/15 12,500 10,000 -50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 7,500 2015 Ten Largest Holdings2 First Horizon National Corp. .................................................... 3.8% Cardinal Health Inc. ................................................................. 3.5% Xylem Inc. .................................................................................
3.4% Applied Materials Inc. ............................................................. 3.4% SEI Investments Co. ................................................................. 3.4% Patterson Companies Inc. ........................................................
3.2% DENTSPLY International Inc. ................................................... 3.2% Pentair plc ................................................................................. 3.2% Sysco Corp. ...............................................................................
3.1% Fiserv Inc. .................................................................................. 3.1% Total........................................................................................ 33.3% a Morningstar Rating of 3, 5 and 5 stars for the 3-, 5- and 10-year periods, respectively. Other classes may have different performance characteristics.
Past performance is no guarantee of future results. 1 The chart shows the growth of a hypothetical $10,000 investment since inception date and does not reflect the deduction of taxes a shareholder would pay on fund distributions or the redemption of fund shares. 2 Percent based on total net assets of date indicated. 3 Excluding cash and cash equivalents. Performance data quoted represents past performance and are no guarantee of future returns. Current performance may be lower or higher than the performance data quoted, and most recent month end performance is available on the Parnassus website (www.parnassus.com). Investment return and principal will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original principal cost.
The Russell Midcap Index is a widely recognized index of common stock 2006 2007 2008 2009 Sector Weightings3 Consumer Discretionary Consumer Staples Energy Utilities Financials Health Care Industrials Materials Information Technology Telecom Services 2010 2011 2012 2013 2014 Parnassus Mid Cap Fund Russell Midcap Index 4% 4% 5% 16% 6% 6% 10% 6% 15% 10% 9% 6% 0% 1% 2015 16% 23% 21% 13% 14% 15% prices. An individual cannot invest directly in an index. An index reflects no deductions for fees, expenses or taxes.
Returns shown for the fund do not reflect the declaration of taxes a shareholder would pay on the fund distributions or the redemption of fund shares. The Parnassus Funds are underwritten and distributed by Parnassus Funds Distributor, a subsidiary of Parnassus Investments and a FINRA member. Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of the fund and should carefully read the prospectus or summary prospectus, which contain this information. A prospectus or summary prospectus can be obtained on the website, www. parnassus.com, or by calling (800) 999-3505. PARNASSUS INVESTMENTS® . Parnassus Mid Cap Fund SM Fourth Quarter 2015 All information, unless otherwise indicated, is as of 12/31/2015 Portfolio Managers Fund Characteristics Fund Russell Midcap Index Matthew D. Gershuny Ave Weighted Mkt Cap ($Bn) $12.6 $12.2 P/E Ratio 23.2x P/B Ratio • Director of Research, Portfolio Manager • With firm since 2006 • Investment industry since 1997 • Portfolio Manager since 2008 • M.B.A., Michigan University 2006 • B.A., Philosophy, Cornell University 1995 Lori A. Keith • Portfolio Manager, Senior Research Analyst • With firm since 2005 • Investment industry since 1994 • Portfolio Manager since 2008 • M.B.A., Harvard Business School 2000 • B.A., Economics, University of California, Los Angeles 1989 Number of Holdings Portfolio Turnover (2015 Annual) Fund Facts Investor Shares Institutional Shares Ticker PARMX PFPMX 19.9x CUSIP 701765885 701765505 3.0x 2.3x Minimum Investment $2,000 $100,000 42 831 Gross Expense Ratio 1.09% 0.94% 58.0% - Net Expense Ratio 0.99% 0.85% 4/29/2005 4/30/2015 Average Weighted Market Cap is the average capitalization of all stocks in the portfolio, weighted by each holding’s size in the portfolio. Price/Earnings (P/E) Ratio is a ratio of a stock’s current price to its per-share earnings over the past 12 months (or “trailing” 12 months).
Price/Book (P/B) Ratio is the ratio of a stock’s latest closing price divided by its book value per share. Inception Date Distribution Frequency Annually Total Net Assets $554.6MM E xpenses based on total net assets, net of reimbursement. As described in the Fund’s current prospectus dated May 1, 2015, Parnassus Investments has contractually agreed to limit total operating expenses to 0.99% of net assets for the Parnassus Mid Cap Fund—Investor Shares and to 0.85% of net assets for the Parnassus Mid Cap Fund— Institutional Shares. This agreement will not be terminated prior to May 1, 2017, and may be continued indefinitely by the Adviser on a year-to-year basis. Firm Overview Parnassus Investments® is an independent and employee-owned investment management company based in San Francisco, CA. Founded in 1984, the firm seeks to invest in businesses that have increasingly relevant products or services, sustainable competitive advantages, quality management teams and ethical business practices.
We believe the most attractive opportunities for investments are when companies with good business fundamentals become temporarily undervalued due to market sentiment. Fund Statistics (5 Year) Alpha 1.71% - Beta 0.86 1.00 R-Squared 0.91 1.00 Sharpe Ratio 1.00 0.88 11.68% 13.05% Downside Risk 6.80% 3.94% - Active Share 95.12% Style 7.64% Tracking Error Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha.
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1.00 means that the share price moves exactly in line with the market. A beta over 1.00 suggests that the share price will typically be more volatile than the market, and conversely, a beta below 1.00 indicates that the share price will typically be less volatile than the market.
R-Squared is a measurement of how closely the portfolio’s performance correlates with the performance of a benchmark index such as the Russell Midcap Index. Standard Deviation is a calculation used to measure Russell Midcap Index Standard Deviation Total Assets Under Management: $15.6 billion Investor Shares - variability (risk) of a portfolio’s performance. Sharpe Ratio is a ratio used to measure risk-adjusted performance.
It is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns. Downside Risk is a statistical measurement of a portfolio’s dispersion below the mean return of a benchmark. Tracking Error is the standard deviation of the difference between the portfolio return and the desired investment benchmark return.
Active Share measures the percentage amount your portfolio differs from a passive benchmark. Risks: The Fund’s share price may change daily based on the value of its security holdings. Stock markets can be volatile, and stock values fluctuate in response to the asset levels of individual companies and in response to general U.S. and international market and Parnassus Funds’ equity style box is based on the portfolio’s overall targeted capitalization range and relative valuation. Large Cap Mid Cap Lipper Category: Mid-Cap Core Small Cap Value Core Growth economic conditions.
Security holdings in the fund can vary significantly from broad market indexes. The Fund invests in the stocks of small and mid-cap companies, which are generally riskier than larger companies, and the Fund’s share price may be more volatile than funds that invest in larger companies. PARNASSUS INVESTMENTS® 1 Market Street, Suite 1600 San Francisco, CA 94105 www.parnassus.com (800) 999-3505 .
