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Is Parnassus Mid-Cap Fund (PARMX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Mid Cap Growth fund? Parnassus Mid-Cap Fund (PARMX - Free Report) is a potential starting point. PARMX bears 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. Since Parnassus Mid-Cap Fund made its debut in April of 2005, PARMX has garnered more than $2.10 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. This fund has delivered a 5-year annualized total return of 7.46%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.62%, 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. Over the past three years, PARMX's standard deviation comes in at 10.75%, compared to the category average of 11.17%. Looking at the past 5 years, the fund's standard deviation is 10.9% compared to the category average of 11.43%. 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. In the most recent bear market, PARMX lost 45.11% and outperformed its peer group by 6.34%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 0.84, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -0.65, 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 principally on equities that are traded in the United States.
Right now, 85.35% of this mutual fund's holdings are stocks, which have an average market capitalization of $16.41 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Non-Durable
Finance
Retail Trade
Turnover is 31.52%, which means this fund makes fewer trades than its comparable peers.
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 1.18%. Looking at the fund from a cost perspective, PARMX is actually cheaper than its peers.
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 ( PARMX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Parnassus Mid-Cap Fund (PARMX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Mid Cap Growth fund? Parnassus Mid-Cap Fund (PARMX - Free Report) is a potential starting point. PARMX bears 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. Since Parnassus Mid-Cap Fund made its debut in April of 2005, PARMX has garnered more than $2.10 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. This fund has delivered a 5-year annualized total return of 7.46%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.62%, 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. Over the past three years, PARMX's standard deviation comes in at 10.75%, compared to the category average of 11.17%. Looking at the past 5 years, the fund's standard deviation is 10.9% compared to the category average of 11.43%. 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. In the most recent bear market, PARMX lost 45.11% and outperformed its peer group by 6.34%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 0.84, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -0.65, 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 principally on equities that are traded in the United States.
Right now, 85.35% of this mutual fund's holdings are stocks, which have an average market capitalization of $16.41 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Non-Durable
- Finance
- Retail Trade
Turnover is 31.52%, which means this fund makes fewer trades than its comparable peers.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 1.18%. Looking at the fund from a cost perspective, PARMX is actually cheaper than its peers.
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 ( PARMX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.