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Is Parnassus Mid-Cap Fund (PARMX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Mid Cap Growth funds, a place to start could be Parnassus Mid-Cap Fund (PARMX - Free Report) . PARMX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PARMX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
Parnassus is based in San Francisco, CA, and is the manager of PARMX. Parnassus Mid-Cap Fund debuted in April of 2005. Since then, PARMX has accumulated assets of about $2.21 billion, according to the most recently available information. Matthew Gershuny is the fund's current manager and has held that role since October of 2008.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 11.44%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.37%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of PARMX over the past three years is 18.29% compared to the category average of 18.54%. Over the past 5 years, the standard deviation of the fund is 15.06% compared to the category average of 15.63%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.92, so investors should note that it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -1.17, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
The mutual fund currently has 88.32% of its holdings in stocks, which have an average market capitalization of $23.06 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
This fund's turnover is about 62.08%, so the fund managers are making fewer trades than the average comparable fund.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PARMX is a no load fund. It has an expense ratio of 0.99% compared to the category average of 1.20%. PARMX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,000, and each subsequent investment should be at least $50.
Bottom Line
Overall, Parnassus Mid-Cap Fund ( PARMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on PARMXin the Mid Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Parnassus Mid-Cap Fund (PARMX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Mid Cap Growth funds, a place to start could be Parnassus Mid-Cap Fund (PARMX - Free Report) . PARMX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PARMX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
Parnassus is based in San Francisco, CA, and is the manager of PARMX. Parnassus Mid-Cap Fund debuted in April of 2005. Since then, PARMX has accumulated assets of about $2.21 billion, according to the most recently available information. Matthew Gershuny is the fund's current manager and has held that role since October of 2008.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 11.44%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.37%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of PARMX over the past three years is 18.29% compared to the category average of 18.54%. Over the past 5 years, the standard deviation of the fund is 15.06% compared to the category average of 15.63%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.92, so investors should note that it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -1.17, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
The mutual fund currently has 88.32% of its holdings in stocks, which have an average market capitalization of $23.06 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Industrial Cyclical
This fund's turnover is about 62.08%, so the fund managers are making fewer trades than the average comparable fund.Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PARMX is a no load fund. It has an expense ratio of 0.99% compared to the category average of 1.20%. PARMX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,000, and each subsequent investment should be at least $50.
Bottom Line
Overall, Parnassus Mid-Cap Fund ( PARMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on PARMXin the Mid Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.