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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
We note that PARMX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
Parnassus is responsible for PARMX, and the company is based out of San Francisco, CA. Since Parnassus Mid-Cap Fund made its debut in April of 2005, PARMX has garnered more than $2.02 billion in assets. The fund's current manager, Matthew D. Gershuny, has been in charge of the fund since October of 2008.
Performance
Of course, investors look for strong performance in funds. PARMX has a 5-year annualized total return of 11.11% and it sits in the bottom 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 9.76%, 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. Compared to the category average of 10.16%, the standard deviation of PARMX over the past three years is 9.38%. The standard deviation of the fund over the past 5 years is 9.21% compared to the category average of 9.85%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. PARMX lost 45.11% in the most recent bear market and outperformed its peer group by 6.01%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.83, 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 -1.76, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 1.16%. Looking at the fund from a cost perspective, PARMX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $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, Parnassus Mid-Cap Fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on PARMX in 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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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
We note that PARMX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
Parnassus is responsible for PARMX, and the company is based out of San Francisco, CA. Since Parnassus Mid-Cap Fund made its debut in April of 2005, PARMX has garnered more than $2.02 billion in assets. The fund's current manager, Matthew D. Gershuny, has been in charge of the fund since October of 2008.
Performance
Of course, investors look for strong performance in funds. PARMX has a 5-year annualized total return of 11.11% and it sits in the bottom 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 9.76%, 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. Compared to the category average of 10.16%, the standard deviation of PARMX over the past three years is 9.38%. The standard deviation of the fund over the past 5 years is 9.21% compared to the category average of 9.85%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. PARMX lost 45.11% in the most recent bear market and outperformed its peer group by 6.01%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.83, 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 -1.76, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 1.16%. Looking at the fund from a cost perspective, PARMX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $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, Parnassus Mid-Cap Fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on PARMX in 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.