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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, Parnassus Mid-Cap Fund (PARMX - Free Report) could be a potential option. PARMX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), 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
PARMX is a part of the Parnassus family of funds, a company based out of San Francisco, CA. Parnassus Mid-Cap Fund debuted in April of 2005. Since then, PARMX has accumulated assets of about $2.27 billion, according to the most recently available information. The fund is currently managed by Matthew D. Gershuny who has been in charge of the fund since October of 2008.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 8.49%, and is 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 11.41%, 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 10.83%, compared to the category average of 12.24%. The fund's standard deviation over the past 5 years is 10.97% compared to the category average of 11.94%. 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. In PARMX's case, the fund lost 45.11% in the most recent bear market and outperformed its peer group by 7%. This makes the fund a possibly better choice than its peers during a sliding market environment.
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. Over the past 5 years, the fund has a negative alpha of -0.62. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital 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 1.22%. So, PARMX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,000, investors should also note that each subsequent investment needs to 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 similar performance, average downside risk, and lower fees, Parnassus Mid-Cap Fund ( PARMX ) looks like a great 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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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, Parnassus Mid-Cap Fund (PARMX - Free Report) could be a potential option. PARMX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), 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
PARMX is a part of the Parnassus family of funds, a company based out of San Francisco, CA. Parnassus Mid-Cap Fund debuted in April of 2005. Since then, PARMX has accumulated assets of about $2.27 billion, according to the most recently available information. The fund is currently managed by Matthew D. Gershuny who has been in charge of the fund since October of 2008.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 8.49%, and is 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 11.41%, 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 10.83%, compared to the category average of 12.24%. The fund's standard deviation over the past 5 years is 10.97% compared to the category average of 11.94%. 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. In PARMX's case, the fund lost 45.11% in the most recent bear market and outperformed its peer group by 7%. This makes the fund a possibly better choice than its peers during a sliding market environment.
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. Over the past 5 years, the fund has a negative alpha of -0.62. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital 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 1.22%. So, PARMX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,000, investors should also note that each subsequent investment needs to 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 similar performance, average downside risk, and lower fees, Parnassus Mid-Cap Fund ( PARMX ) looks like a great 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.