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Is Parnassus Mid-Cap Fund (PARMX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Mid Cap Growth fund category, make sure to pass over Parnassus Mid-Cap Fund (PARMX - Free Report) . PARMX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes PARMX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts 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 made its debut in April of 2005, and since then, PARMX has accumulated about $2.02 billion in assets, per the most up-to-date date available. The fund's current manager, Matthew D. Gershuny, has been in charge of the fund since October of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 11.11%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 9.76%, which places it in the bottom 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 9.38% compared to the category average of 10.05%. The standard deviation of the fund over the past 5 years is 9.21% compared to the category average of 11.46%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. PARMX lost 45.11% in the most recent bear market and outperformed its peer group by 6.01%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.83, which means 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. PARMX has generated a negative alpha over the past five years of -1.76, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. 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.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Parnassus Mid-Cap Fund has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Mid Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PARMX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Parnassus Mid-Cap Fund (PARMX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mid Cap Growth fund category, make sure to pass over Parnassus Mid-Cap Fund (PARMX - Free Report) . PARMX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes PARMX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts 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 made its debut in April of 2005, and since then, PARMX has accumulated about $2.02 billion in assets, per the most up-to-date date available. The fund's current manager, Matthew D. Gershuny, has been in charge of the fund since October of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 11.11%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 9.76%, which places it in the bottom 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 9.38% compared to the category average of 10.05%. The standard deviation of the fund over the past 5 years is 9.21% compared to the category average of 11.46%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. PARMX lost 45.11% in the most recent bear market and outperformed its peer group by 6.01%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.83, which means 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. PARMX has generated a negative alpha over the past five years of -1.76, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. 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.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Parnassus Mid-Cap Fund has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Mid Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PARMX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.